Amazon To Invest $2 billion In India, A Day After Flipkart's $1 Billion Funding

NEW DELHI: A day after Flipkart announced raising $1 billion in funds, e-commerce giant Amazon on Wednesday said that it will invest an additional $2 billion in India to support its growth in the country.

"After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations," said Jeff Bezos, founder and CEO of Amazon.com.

"We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India," Bezos said. "At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales. A big 'thank you' to our customers in India - we've never seen anything like this," he added.

Amazon, which just announced second-quarter loss of $126 million, has become increasingly aggressive in India. In about 13 months it has launched 28 categories of products and has grown to host 8,500 merchants on its platform.

Meanwhile, Flipkart, which raised $1 billion from a group of investors including Tiger Global, Naspers and Singapore's GIC, is the largest online retailer in the country. It reached $1 billion in sales last fiscal and, according to sources, is on track to breach the $3 billion mark this fiscal. And Flipkart now has a marketing budget that is in the millions of dollars.

The seven-year-old company has so far raised over $1.7 billion in risk capital. In May, it sucked in $210 million led by Russian billionaire Yuri Milner's DST Global a few days after announcing its acquisition of fashion portal Myntra for an estimated $370 million.

"This funding ensures that Flipkart can now invest in building on the promise they have shown," said Arvind Singhal, chairman of retail advisory firm Technopak.