Warc, 31 July 2014
NEW DELHI: Coming just a day after Flipkart, India's largest e-commerce firm, announced that it had secured $1bn in extra investment, rival Amazon has said it will invest a further $2bn in its Indian operations.
Amazon, the world's largest online retailer, had earlier in the week announced that it plans to open five new warehouses in the country, which will double its storage capacity to over 500,000 sq ft, Business Standard reported.
The new warehouses, or "fulfilment centres", will be based in Delhi, Chennai, Jaipur, Ahmedabad and Tauru on the outskirts of Gurgaon – and they will complement the company's two existing centres in Mumbai and Bangalore.
However, Amazon says India is on track to be its "fastest country ever" to reach $1bn in sales and its new round of investment can be seen as a sign of its determination to expand in a growing market.
Jeff Bezos, founder and CEO of Amazon, said: "After our first year in business, the response from customers and small and medium-sized businesses in India has surpassed our expectations.
"We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2bn, our team can continue to think big, innovate, and raise the bar for customers in India.
"At current scale and growth rates, India is on track to be our fastest country ever to generate a billion dollars in gross sales."
Flipkart is confident, too, about its prospects after sources said its $1bn of fresh funding gave it a valuation of about $7bn, the Wall Street Journal reported.
Co-founders Sachin Bansal and Binny Bansal, both former employees at Amazon, said it plans to hire more than 1,000 technology engineers over the next year and to make more use of data and analytics.
"We believe that India can produce a $100bn internet company in the next five years and we want to be that company," said Sachin Bansal, Flipkart's chief executive.
Data sourced from Business Standard, Wall Street Journal; additional content by Warc