Amazon takes a leap over Flipkart, to invest $2 bn in India

Giving a clear message to competitors that Amazon doesn't want to play second fiddle, company's chief Jeff Bezos on Wednesday announced to invest an additional USD 2 billion in India.

On Tuesday, India's largest online retailer Flipkart announced that it had raised USD 1 billion to further its business. Responding to Flipkart's USD 1 billion fundraising announcement, Jeff Bezos said he will spend USD 2 billion (Rs 12,000 crore) to grow business in India.

This is the strongest indication by the Seattle-based Internet entrepreneur of his intent to battle for top honours in the Indian online retail market where Amazon is on track to record sales of over Rs 6,000 crore in just over a year of operations.

"We've never seen anything like this," said Bezos, the founder and chief executive officer of Amazon. "After our first year in business, the year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations," he said in a statement on Wednesday .

By making this announcement within a week of Amazon declaring a loss of USD 126 million on revenue of USD 19.34 billion in second quarter of 2014, Bezos is seen to be signalling in no uncertain terms his commitment to grow his business in India after having failed to make inroads in the Chinese online retail industry dom inated by Jack Ma's Alibaba Group.

"We see huge potential in the Indian economy and for the growth of ecommerce in India. Our team can continue to think big, innovate, and raise the bar for customers in India," he said.

Dion Global Solutions

Read more about: amazon, flipkart, fundraising, retail
Story first published: Thursday, July 31, 2014, 9:20 [IST]
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