Ahead of Jeff Bezos' visit, the world’s largest online retailer Amazon.com Inc has stepped up its investment in India. The Seattle-headquartered firm has pumped in a total investment of Rs 1,715 crore into its digital payments arm Amazon Pay (India) Pvt Ltd and Amazon Wholesale (India) Pvt Ltd.
The funding is expected to help Amazon tap India's booming digital payments market, compete with Walmart-owned PhonePe, Alibaba-backed Paytm, and Google's mobile payment service Google Pay. The funding would also help it to take on its rival Flipkart with whom the company is in a fierce battle for dominance in India’s online retail market.
Amazon Pay (India) allotted 135.50 crore equity shares of Rs 10 each aggregating to Rs 1,355.00 crore at par on rights basis to the existing shareholders of the company, according to the regulatory documents filed by Amazon, which were sourced from business signals platform Paper.vc. Also, Amazon Wholesale (India) Pvt. Ltd., allotted 36 crore equity shares of Rs 10 each aggregating to Rs 360 crore to the same existing shareholders of the firm on rights basis. The resolution for this capital infusion was passed by the board of directors of both the entities from December 30-31, 2019.
Last year, Amazon invested Rs 2,800 crore into the Amazon Seller Services marketplace and Rs 450 crore into Amazon Pay (India). In December 2018, Amazon Seller Services has also received Rs 2,200 crore from the parent company.
Amazon has made over $5 billion investment in India, so far. Some reports suggest that the company may have invested an additional $2 billion on top of that.
Amazon’s new investment into the India market also comes at a time when antitrust regulatory body Competition Commission of India (CCI) has ordered an investigation against Amazon and Walmart-owned Flipkart on complaints of deep discounting practices and tie-ups with preferred sellers. During his India trip, Jeff Bezos is likely to meet Prime Minister Narendra Modi, various government officials and industry leaders and may also discuss various regulatory issues, according to the sources. Bezos is also expected to face unprecedented protests from thousands of small scale traders during his visit to the country.
“The protests will be spearheaded by Confederation of All India Traders (CAIT) representing 70 million traders and 40,000 trade associations,” CAIT national secretary Sumit Agarwal said in a tweet on Tuesday. CAIT also welcomed the step by CCI to order an investigation into the business model of Amazon and Flipkart. “Protests (are) planned across 300 cities tomorrow against India visit of Jeff Bezos,” CAIT tweeted on Tuesday.
Like in the US, Amazon is pitted against Walmart, which acquired a majority in Flipkart in 2018 in a $16-billion deal, to dominate the e-commerce market in India. This market is expected to touch $200 billion by 2028, from about $30 billion in 2018. Amazon is also eyeing the digital payments space in India which is expected to rise fivefold to reach $1 trillion by 2023, and it would be led by the growth in mobile payments, according to a report by financial services company Credit Suisse.