Amazon invests in India, despite e-commerce rules

The Dollar Business Bureau

Amazon, the leading global internet retailer, is heavily investing in India to compete with local rivals in e-commerce space such as Snapdeal and Flipkart. However, the company said that it will abide by the rules for e-commerce companies laid by the government that restrict internet retailers from providing heavy discounts and limit sales from their stored products to 25 percent.

Amazon’s Head of Investor Relations, Phil Hardin said the company is happy to know the latest clarifications. Amazon can operate in any system, having proper clarity of rules.

Amazon is competing with Flipkart and Snapdeal, both funded by Chinese e-commerce giant Alibaba, to acquire a significant market share in the growing e-commerce market in India. The company, among the leading players in India’s e-commerce segment, is focussing to retain its share in the market in the midst of growing competition.

To adhere with the government’s rules, most of the Indian e-commerce companies have stopped their seasonal sales, offering heavy discounts to customers. Now, they are emphasising to enhance their logistics and customer service.

However, Amazon is still heavily investing in the country. The company said that in the period between January to March, the margins on its foreign operations were less than that of the US, due to huge investments made by the company in India.

Brian Olsavsky, Chief Financial Officer at Amazon.com said, “In India, we are making massive investments and excited about the results. We will continue to invest hugely in the country.”

After successfully dominating the US market, Amazon considers India as the last big opportunity globally as it fails to make a mark in China.

In January 2016, Amazon invested Rs 1,980 crore in its Indian unit, the largest single capital infusion by Amazon in the country, and before that in December 2015, it invested Rs 1,696 crore.

The e-commerce giant has infused more than Rs 15,000 crore in its India operations and is moving closer to overtake the market leader Flipkart.