Amazon infuses Rs 1,125 Cr in Indian e-marketplace unit

Amazon seller services, the online marketplace unit of e-commerce giant Amazon, has received Rs 1,125 crore in internal funding from Singapore-based parent entity Amazon Corporate Holdings, according to an ET report via Tofler.

This is the third tranche by Amazon in its Indian unit this year. Earlier, it had infused Rs 2,310 crore in July and Rs 2,208 crore in January, taking the total capital infusion to Rs 5,643 crore in 2020. To recall, the previous two years saw Rs 6,200 crore and Rs 9,450 crore investment respectively.

Every year before the festival season, e-commerce major Flipkart and Amazon receive funds from their holding entities. While Amazon has received these funds in the internal round, the company’s arch-rival Flipkart recently completed a $1.3 billion external round from Walmart, Tencent and Qatar Investment Authority.

Last week, Entrackr had exclusively reported Walmart’s $560 million fresh infusion in Flipkart.

Both companies compete fiercely against each other during the festive season (October and November). Given the Covid-19 induced pandemic affected them badly, the upcoming festive season will be crucial for both e-commerce marketplaces.

According to a report by consulting firm Redseer, e-commerce gross merchandising volume or GMV could hit $7 billion during the festive season in 2020 from $3.8 billion in 2019. Out of the $7 billion, Amazon’s Great Indian Shopping Festival and Flipkart’s Big Billion Days are collectively expected to clock $4 billion in GMV.

Since these e-commerce players mainly focus on electronic commerce during the festive season, sale of mobile phones, gadgets and home appliances will see the majority among overall products sold on their platform. Other categories such as fashion and home and kitchen will also see a spike in sales.

Apart from horizontal e-commerce, Amazon is going to face stiff competition in the grocery, food and medicine delivery segment. With the entry of JioMart in grocery, the hyperlocal vertical has become a hot favourite for all. A separate report from RedSeer also said that the size of the online grocery market in India is expected to touch $3 billion by 2020 from $1.9 billion in 2019.