Jeff Bezos-headed US giant Amazon is slowly but strongly moving towards its objective of investing $5 billion into the Indian market. The latest infusion from the parent company is worth Rs 2,700 crore, according to a report in Economic Times.
This comes after Amazon India had received almost a similar amount of Rs 2,600 crore in May this year. With these, Amazon appears to have reached a figure of $3.6 billion or about Rs 25,000 crore.
Besides this, there has been a $100 million allocation meant for Amazon Retail, the division that is focusing on the grocery and daily essentials business in India. It is understood that Amazon has committed $500 million to creating this business as it sees enormous scope in the area.
But the immediate challenge for Amazon in India would be to stand up to the might of Flipkart in the ensuing festival season in the country. According to a recent Forresterâ€™s research data, Flipkart is almost on par with Amazon in the online retail market in India, with 31.9% against 31.1% of Amazon. But this is the standalone figure for Flipkart; as a group it enjoys a 39.5% share. These figures are before the impact of Walmart joining forces. Amazon will be keen to limit the collateral damage it may have to bear when Walmart brings its might to bear upon the business of Flipkart, particularly having received the CCI approval for the deal.
While Amazon is looking to rapidly grow the grocery and foods segment, it has to contend with many other well-entrenched players such as BigBasket and Grofers apart from the other ecommerce platforms including Flipkart planning to go more aggressive with the segment. Faster growth could come from categories like mobile phones, electronics and fashion. But in the case of fashion too, Flipkart has a head start with top sites like Myntra and Jabong having a huge market share.