Amazon wants to make India its second largest market outside of the United States, and has the capital to back up its plans. A £3.2 billion injection into the Amazon India subsidiary should see the expansion in 2015, with the goal of surpassing Flipkart in the region.
India is fast becoming the most influential country for business, with 1.2 billion people in the country and a growing middle class. It also has no Internet censorship blocking companies like Amazon from entering the market, making it even more valuable than China.
Amazon set up shop in 2013, but that was already far too late. Flipkart launched in 2007 and by 2013 was the head-honcho of e-commerce in the country. It has only continue to grow as India becomes a more vibrant online economy.
The surge in interest from Amazon may lead to extremely competitive pricing, considering Flipkart and Amazon are both known for cheap goods and sales. Amazon has shown in the US and Europe it will drop billions in short-term to win the long-term.
Currently, Amazon doesn’t have any fulfillment centers like in the US and Europe. This £3.2 billion injection should allow Amazon to start investing in large facilities to increase shipment speed.
Amazon also plans to launch Prime in India by the end of the year. Customers should be able buy a product and receive it one to two days later, although there is bound to be some teething issues with the membership at first.
While the report didn’t go into detail on Amazon’s other plans, Prime Instant Video might also be a possibility. We know Netflix wants to become active in India by 2016 (opens in new tab), speaking to networks and programmers in the region to discuss terms.
Source: Economic Business Times (opens in new tab)