Stepping up its finance to take on Amazon and Alibaba in India, e-tailer Flipkart’s parent firm has injected around Rs 4,472 crore into its wholesale arm.
This is the third and the single largest investment, which was made in February, into Flipkart’s units, according to the Registrar of Companies (RoC) filing cited by ET.
The company also put in Rs 370 crore into its online retail platform.
According to Industry experts, the fresh funding will be deployed into grocery and other categories.
Earlier, the e-tailer had put Rs 1,148 crore in its business-to-business fashion arm Myntra Jabong Private Limited, a wholesale unit for fashion portals Myntra and Jabong, through Flipkart’s Singapore-based unit FK Myntra Holding Private Limited.
The move will further intensify the competition in the space, where after Amazon, Alibaba has been betting big in India. Alibaba along with its payment affiliate Alipay had invested about $425 million in e-grocer Bigbasket and food tech major Zomato. Recently, it also invested $35 million in Pune-based logistics company Xpressbees.
The Jack Ma-led Chinese group had already made an announcement to deploy around $8 billion over the next four years in areas including, payment, enterprise, and entertainment (OTT), among others. It’s also slated to spend about $2 billion in e-commerce and logistics and buy Paytm’s e-commerce arm Paytm Mall.
Besides Alibaba, Softbank had invested about $6 billion in companies competing against Amazon. It put massive $2.6 billion in Flipkart while Vijay Shekhar Sharma-led company secured over $1.4 billion from the Japanese technology conglomerate.
While Flipkart’s close competitor Amazon has also been stepping up investments over the last few years. The parent firm infused Rs 1,950 crore into its Indian arm Amazon Seller Services (ASS) in January 2018.
In November, the Seattle-based company had invested $450 million (Rs 2,900 crore) into ASS. It was the largest capital infusion into its marketplace arm ever in a year. In October last year, it infused Rs 1620 crores into its Indian marketplace arm.
Earlier, Amazon’s boss Jeff Bezos had committed over $5 billion in its Indian arm.
Both Amazon and Flipkart use the wholesale units as distribution arms that directly source products from brands across the world and then give them to third-party merchants that sell on their respective platforms.
They continue to be locked in the battle for supremacy in India’s online retail market. Currently, a large chunk of Amazon’s investment in India are going into its Prime loyalty programme which offers free one and two-day shipping on products and unlimited access to video and music streaming services. Recently, Amazon has shown aggressive approach towards e-grocery space in the country.
Meanwhile, Flipkart is looking for startups in Silicon Valley to bring in differentiation through Artificial Intelligence (AI) and Machine Learning (ML) technology.
Flipkart is still reported to be ahead of its competitor in terms of gross merchandise value (GMV) of the products sold on its platform. Though the US retailer claims to be in the lead position in terms of the total number of stock keeping units (SKUs) sold.