Amazon infuses $308 mn in its Indian marketplace services unit

Amazon infuses $308 mn in its Indian marketplace services unit
Photo Credit: Reuters

Ecommerce major Amazon has invested $308 million (around Rs 2,310 crore at current exchange rates) in Amazon Seller Services, its Indian marketplace services unit. 

The Seattle headquartered firm made the investment through two units -- Singapore-based Amazon Corporate Holdings and Mauritius-based Amazon.com. The entities subscribed to 231 crore equity shares, issued by Amazon Seller Services at Rs 10 per share, regulatory filings with the Ministry of Corporate Affairs show. 

This is the first investment by the US parent in the Indian arm since the Covid-19 outbreak began in the country. Amazon Seller Services last raised capital in February, when its holding companies infused $310 million in it. 

For the financial year 2018-19, Amazon has infused $391 million (Rs 3,140 crore) in the Indian marketplace services unit, lower by a third compared to the $1.3 billion (Rs 9,450 crore) it invested the previous year. In October 2019, Amazon put in $453 million in the company, separate filings show. 

Amazon Seller Services provides marketplace, advertisement and marketing support services, along with training to sellers registered on its platform.  

The latest capital infusion is likely a part of the $1 billion investment announced by Amazon founder and CEO Jeff Bezos in January during his India visit. The company plans to increase the number of sellers registered on its platform from 5.5 lakh to one crore by 2025. A day before Bezos’ visit, Amazon infused $242 million into two separate Indian subsidiaries -- while digital payments vertical Amazon Pay received $191 million, Amazon Wholesale got the rest.

In April, the ecommerce giant said that it had allocated Rs 10 crore to onboard more local kirana stores on its platform through its Local Shops programme, which claims to have added over 5,000 local retailers and shopkeepers to the platform in the past six months. In the same month, Amazon plugged $37.5 million (around Rs 284 crore) into its Indian food and grocery retail unit, Amazon Retail, in an equity share issue.  

Although the delivery of non-essential goods by ecommerce companies was suspended while the nationwide lockdown was in effect, operations have resumed since May in most of the unaffected areas.     

In a survey conducted by research firm LocalCircles, 21% of the participants said they were purchasing essential and non-essential goods from ecommerce sites, while 19% said they chose home delivery services from local retail stores. The survey collected responses from 25,000 participants from 231 districts in India, of which 57% were from tier-1 cities while the rest were from tier-2 and tier-3 cities. 

In April, Amazon rival Walmart-owned ecommerce platform Flipkart infused $60.7 million in its B2B marketplace Flipkart Internet

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