Amazon Spending $2 Billion On Indian Expansion, Seeking To Oust Flipkart

 @JeffStone500j.stone@ibtimes.com on August 08 2014 10:39 AM
Amazon warehouse
Some of the $2 billion Amazon is investing in India will be dedicated to building new warehouses and increasing product options online. Reuters/Ralph D. Freso

Amazon.com Inc. (NASDAQ:AMZN), despite only launching an Indian version of its website last year, is investing in a deeper selection of products the U.S. company hopes will make it a more attractive destination than Flipkart.

Both e-commerce companies clearly recognize that India -- the second-most populated country in the world with 1.2 billion people -- presents a massive revenue opportunity, and are investing as such. Flipkart, which announced on July 29 that it raised another $1 billion in funding, claims to already have a $1 billion turnover in India. Amazon now hopes to steal some of that business by investing $2 billion into expansion to India, much of which will be dedicated to beefing up the online product selection.

“Customers don’t care about how much gross merchandise sales you have. You don’t go and shop saying, ‘How much did you sell last year?’” Amit Agarwal, the vice president and managing director of Amazon’s Indian unit, said in an interview with the Wall Street Journal.

“The number of sellers on the Amazon platform grew 90 times in the last 12 months to 10,000," Agarwal said. "The traffic on our website is growing at double digits … India is on track to become the fastest ever Amazon geography to get to a $1 billion in sales. The kind of growth rate Amazon is experiencing in India has never been seen before.”

Agarwal also told the Journal that Amazon plans to dedicate some of that $2 billion to lower costs and  to help small and medium-sized sellers find their way online, with warehousing and logistics among the most immediate concerns. 

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