PM Modi in his current visit to the US, met with President Obama and Amazon founder and CEO Jeff Bezos. At the US-India Business Council meet, Bezos made an announcement saying that Amazon is planning to add $3 billion to their existing $2 billion investment in India.
He said, “We have already created some 45,000 jobs in India and continue to see huge potential in the Indian economy.”
With local rival Flipkart thriving recently in the market, it has become imperative for the e-commerce giant to make such an investment. With its Chinese rival Alibaba making its way into the market through channels like Paytm, this kind of investment will go a long way. The entire e-commerce market is worth about $25 billion in India, and when Amazon’s investment goes up to $5 billion, its share is bound to increase almost proportionately.
Since the regulations in the country prevent foreign retailers from selling directly in India, it only operates as a marketplace for third-party vendors. Bezos also lauded the ‘Amazon.in’ team saying that they have surpassed all the expectations.
A part of this investment will be dedicated to setting up small distribution centers across the country, to reduce the third party logistics costs. Last year, the company used a unique technique to educate the small business owners about selling their products online. It sent out carts in business districts across more than 30 cities serving tea and lemon juice.
Bezos isn’t the only international CEO who has expressed special interest in the country. Last month, Tim Cook made a visit to India in search of avenues for investment. Apple also has made an investment towards opening an app design and development center in Bangalore. These investments have been welcome into the country with PM’s ‘Make in India‘ campaign. They have a long-run appeal value.