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Amazon To Continue Investing Heavily In India

Global e-commerce giant Amazon continues to invest “very heavily” in the Indian market, encouraged by its strong sales numbers and expanding seller base, a top company executive has said.

Amazon Senior Vice President and CFO Brian T Olsavsky said the US based company has seen sales quadruple during the festive season (pre Diwali sales) compared to last year.

“We’re really encouraged with what we are seeing, both on the customer side and the seller side. On the customer side, active customer accounts are up 230 per cent year over year.

“We are in the middle of the Diwali season that is going really well. Sales are 4x what they were last year,” he said on an investor call. Olsavsky added that the company has been adding 40,000 products a day so far this year on its platform and the number of sellers has grown more than 250 per cent year on year.

“About 90 per cent of those sellers are using our logistics and warehouse services. And as a result, we’ve tripled our fulfilment capacity year over year. “So, we are very encouraged, as I said last quarter in India, and continue to invest there very heavily,” Olsavsky said.

However, he declined to disclose specific investment details. India is one of the fastest growing markets for Amazon. The online retail giant had announced an investment of $2 billion (roughly Rs. 13,000 crores) to expand its operations in India last year.

Amazon, which competes with the likes of Snapdeal and Flipkart in India, operates under a marketplace model here as regulations in the country do not allow foreign capital in business to consumer (B2C) e-commerce.

According to a BCG report, the e-commerce industry in India is expected to touch $60-70 billion (roughly Rs. 3,89,990 crores – Rs. 4,55,044 crores) by 2019 from $17 billion (roughly Rs. 1,10,510 crores) in 2014.

Amazon is investing heavily into setting up warehouses across the country to speed up delivery and efficiency. Earlier this month, it set up a new fulfilment centre in Pune, taking the total count to over 21 with a cumulative storage capacity of over five million cubic feet.

“India is a different market and does not have a lot of the same ready fulfilment options that some other countries did. We see that as an opportunity,” Olsavsky said. He added, “We like what we see in India. We think we’re attractive both to customers and to sellers and we like our position.”


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