Amazon pours in Rs 400 crore into Indian logistics arm to expand business operation

Expanding its logistics footprint in India, Amazon has poured in Rs 400 crore more into its Indian logistics arm to expand its business operations, according to filings made by the company with the Registrar of Companies (RoC).

The influx comes at a time when Amazon India is preparing for the annual festive season and also has a three-day sale starting Wednesday. The resolution to expand its authorised share capital was approved in July.

The logistics company said it was in need of funds for expansion of business operations. The authorised equity share capital has been increased to Rs 875 crore from Rs 475 crore.

Earlier, Amazon India owned – Amazon Transportation Services (ATS) had received Rs 207 crore from Amazon Corporate Holding Singapore and Amazon Malaysia and Rs 67 crore in September 2016.

Of late, Amazon and its arch rival Flipkart have been heavily investing in warehousing to streamline supply chain and ensure quick delivery across the country. It had announced to add seven new warehouses, which will employ about 4,000 people.

US-based e-tailer, which has committed an investment of $5 billion in the Indian market, have 41 warehouses across 13 states. Amazon had launched the logistics arm in March 2015 to take on the homegrown rival Flipkart.

Ninety percent of its over 2 lakh sellers use its logistics services. Amazon India has been scaling up its warehousing and fulfilment network to cater to specialised lines of business, including heavy and bulky categories such as furniture and large appliances, and for its foray into food retail and FMCG play, the company said.

Amazon's logistics business will also offer services to its registered sellers even if orders are placed through rival marketplaces like Flipkart and Snapdeal or for their offline distribution.

Flipkart's logistic arm Ekart is also looking to tap offline networks for its courier business and compete with the likes of DTDC and Blue Dart.

Recently, Amazon India claimed to have registered 88 per cent growth in gross sales volume for the June quarter. Amazon India has witnessed an increase of about 60 per cent by value in the same quarter compared to last year, according to the report.