On July 30, just one day after Flipkart, a well-known domestic e-commerce website in India, announced that it had absorbed $1 billion in financing, the US e-commerce giant Amazon quickly announced on Wednesday that the company would add $2 billion in investment in the Indian market to quickly improve its competitiveness in the gradual formation but rapid growth of the Indian e-commerce market.
Amazon began to open an e-commerce website in the Indian market in June last year, and implemented its competitive strategy in the Indian e-commerce market by reducing product prices, launching same-day delivery services, increasing new product types, and launching high-intensity advertising campaigns.
Relevant data show that India's current e-commerce market size is about US$13 billion. Amazon and Flipkart have now joined the market, and Indian e-commerce website Snapdeal, fashion retailer Jabong, and global e-commerce giant eBay are also competing for the Indian e-commerce market.
Regarding the additional $2 billion investment, Amazon CEO Jeff Bezos said in a statement: "With this additional $2 billion investment, our team will be able to continue to consider large-scale innovation measures and improve the level of serving Indian customers. At the current scale and growth rate, India will be the fastest growing market for our company, able to increase our gross revenue by more than $1 billion."
Amazon has not disclosed plans and information about its investment in India before, but starting this Monday, Amazon claimed that the company will increase its influence in the Indian market, such as opening five storage centers, thereby doubling the company's storage capacity in the Indian market to 500,000 square feet.
"In the coming decades, the Indian e-commerce market will depend on which companies are growing faster and which companies can maintain their influence," said Harminder Sahani, executive director of Wazir Advisors, a retail consultancy.
Amazon's revenue generation in the Indian market is mainly by charging third-party suppliers who use the company's website to sell 17 million different products, which sell products on Amazon's website, including books, electronics and clothing. The Indian e-commerce market is growing rapidly, and according to a report jointly released by consulting firm Digital-Commerce, the Indian Internet Mobile Association and the Indian Market Institutions Agency Bureau, the current compound annual growth rate of the Indian e-commerce market is 34%. However, this rate is still lower than that of some other emerging markets, such as China. Data released by consulting firm Technopak shows that tourism services account for about 70% of the $13 billion Indian e-commerce market. According to data from market research firm Forrester, last year, the total price of various products sold through Amazon in the Indian e-commerce market was US$1.6 billion. In comparison, China's e-commerce market is developing faster. According to data from market research firm eMarketer, the Chinese market's e-commerce sales this year will exceed US$180 billion.
At present, the Indian government is considering allowing foreign retailers to sell products directly to consumers. The Indian government has recently taken a measure to allow retailers to sell online products made in India.
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