Amazon.com, Inc. has invested about Rs 2,310 crore (US$ 327.71 million) into Amazon Seller Services Pvt. Ltd, its marketplace unit in India, according to filings with the corporate affairs ministry.
These new funds are expected to help the US e-commerce giant to expand its seller network in India, where a three-month-long strict lockdown aimed at curbing COVID-19 has severely disrupted businesses.
Amazon Corporate Holdings Pvt. Ltd, a Singapore entity, and Amazon.com has made the investment, which was approved by the board of Amazon Seller Services at a meeting on 25 June.
This is the second investment done by the company this year in the Indian marketplace. In January 2020, the company infused over Rs 2,500 crore (US$ 354.66 million) into Amazon Seller Services and Amazon Data Services India.
According to the latest data available, Amazon Seller Services decreased its loss 9.5 per cent year-on-year to Rs 5,685 crore (US$ 806.50 million) for fiscal year 2018-19. Revenues surged 55 per cent to Rs 7,778 crore (US$ 1.10 billion) in 2018-19.
Amazon founder Mr Jeff Bezos pledged US$ 1 billion in new investments to help take small Indian businesses online, as he pulled out all the stops to encourage local merchants, and the government amid regulatory scrutiny and protests by traders.
These investments are expected to help around 10 million small and medium businesses, including manufacturers, resellers, local offline shops, and brands.
More than 600,000 sellers are currently listed on the Amazon marketplace.
In April 2020, the online retailer announced plans to invest Rs 10 crore (US$ 1.42 million) in ramping up a pilot programme that saw Amazon Seller Services reach out to 5,000 local stores selling electronics, apparel, toys, furniture, grocery, home furnishings, to list on its platform as the company continues to expand its range of sellers and products.
The company has extended its work with India’s small business owners, manufacturers, and suppliers. It has been working in attracting more sellers and partnering into its fold to grow its share in the country’s retail market.
In the meantime, large Indian e-commerce firms have been moving up to provide increased support to their seller ecosystem, to guarantee business continuity, after the lockdowns heavily impacted the operations of small and medium-sized businesses.
Amazon has Walmart-owned Flipkart as its competitor in India. Flipkart has also been ramping up its seller network.
As the offline retail has become challenging with current situation, online retail is gaining momentum with the gradual unlocking of businesses.
In May 2020, Amazon said that its India operations were the worst-affected across all its operations worldwide by the pandemic as the Indian government ordered the company to halt the sales of almost all items but groceries during the lockdown that was first imposed on 25 March.