Get ready for an e-commerce battle of epic proportions in India.
Amazon.com today said that it plans to invest $2 billion in India, an announcement that comes a day after Indian e-commerce giant Flipkart announced $1 billion in fresh funding.
In a press release, Amazon.com founder Jeff Bezos said that the company’s growth has exceeded his expectations in its first year in India.
“We see huge potential in the Indian economy and for the growth of e-commerce in India,” he said. “With this additional investment of US $2 billion, 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 a billion dollars in gross sales. A big ‘thank you’ to our customers in India – we’ve never seen anything like this.”
Even with those pronouncements, India could prove to be challenging. Flipkart, founded by former Amazon.com execs Sachin Bansal and Binny Bansal, is taking a page out of the Amazon playbook. The company is losing money, but the fresh capital injection values the business at about $7 billion, according to The Wall Street Journal. Flipkart boasts 22 million registered users, and it sold more than $1 billion worth of goods for the 12-month period ended in March.
Flipkart is aiming to become a $100 billion market value company and looking to top 100 million users in the coming years, milestones that may be achievable given India’s fast-growing population of Internet and mobile phone users.
Amazon.com also faces competition in India from Snapdeal, which is backed by eBay. Earlier this year, Snapdeal raised $133 million from eBay.
“Accelerating growth in India and other emerging markets continues to be a strategy for driving eBay’s global e-commerce leadership,” said eBay Senior Vice President and APAC Managing Director Jay Lee in February.