Key takeaways from Amazon's investment in India

Amazon is treating the $1 bn loss it is likely to make this year as an investment that it hopes will make it India's top e-commerce company

For global technology leader Amazon, India is the ultimate market which it wants to take over at all costs. With total investments of Rs 7,000 crore made in just over 12 months, the Jeff Bezos-led company has managed to make major inroads into the Indian market and plans to continue to do so next year. Here is what its India strategy is about:

Making e-commerce a habit: That has been Jeff Bezos dream always. The company has done the same in US, Europe and other markets, where it continues to invest heavily. From daily grocery needs, to fashion, to entertainment, the company is investing in everything that is seen as essential for people. By tapping into this customer base, the company would be able to get repeat customers.

Reaching the farthest pin-code: Amazon in India is spending heavily on logistics so that it can cater uniformly to customers be it in the metros or tier-III towns. The company is investing on fulfilment centres all over India. At present the company has more than 20 fulfilment centres.

Not losses, but investments into a new market: According to sources close to the company, Amazon might end the year with losses of around $1 billion. However for Amazon, these are not losses but investments it is making into India to gain the maximum marketshare. The company has had the same philosophy in every country. Also, in India, it is leaving nothing to chance. While it was not able to make major inroads into China, the company is making sure that it gains and maintains its leadership position in India.

Gaining local partners: The company has just launched its AmazonNow App in a few metropolitans, as it ventures into daily grocery and delivery in two hours. To achieve that it has got into partnership with a host of hyperlocal e-grocers and medium-to-small grocers, as well as major retail players such as Hypercity, Spar Modern Bazaar, Easy Day, BigBazaar and SRS, among others. Amazon’s big-bang announcement about its Prime Video launch in India shook up the industry not only because of the highly competitive pricing, but also because of its proposed content offering. It announced a total of 18 shows, nine of which are already in production, in collaboration with content makers like The AIB, Phantom Films and Excel Entertainment.  

Ramping up investments in India: In a recent interview with Business Standard, Amit Agarwal, VP and Country Head, Amazon India, made it clear that it would more invest in India. “We look at India as fabulous long-term opportunity for Amazon globally and we would continue to invest aggressively in areas that matter to customers over a long period of time. Our plans would be exactly the same as they have been for the last three years. We would continue to add more selection, figure out how to lower the cost of operations, offer low prices, how to ship products to customers at lower prices. It is exactly the same thing that we have been doing at Amazon for the past 20 years,” he said.