India on Amazon’s mind, plans outwit homegrown rivals

American ecommerce major, Amazon, which has been pursuing its India plans aggressively since the last two years, is now looking at growing making its India business the biggest outside the US. The company is also said to be in the process of adding features like Amazon Instant Video and subscription-based ecommerce services for high-end buyers, which would be called Amazon Prime, later this year. During its earnings call, the company spokespersons have reaffirmed its faith in the country.

Racing ahead of homegrown rivals

As per Internet analytics firm comScoreData May 2015 figures, Amazon India had 23.6 million unique visitors in May, edging past Flipkart narrowly. While Flipkart saw 23.5 million unique visitors, Snapdeal had 17.9 million. An annual comparison in the data shows that Amazon has seen over a 142 percent jump in the number of unique visitors since May 2014 while for Flipkart, it's nearly 80 percent surge.

Amazon has already announced its plans to invest Rs 1,155 crores to strengthen its India presence. The company, in a filing with the Registrar of Companies (RoC) said that it is raising funds through a rights issue to its parent. The funding would be utilized in improving infrastructure and logistics, and technology.

Speaking on Amazon's earnings call, after releasing buoyant second quarter results, CFO Brian Olsavsky had said, “When we see a positive surprise, we double-down on it that's kind of our policy and India is that kind of surprise," Olsavsky said, adding, “We're very happy, very encouraged early on about what we've seen so far with the ramping up of the business, the level of innovation going on for both customers and sellers.”

Comparing Indian market with China, investor relations investor Phil Hardin jhad said, India and China are totally different. India is a country that Amazon is doubling-down on based on the success seen so far.

Driving growth aggressively

By showcasing strong faith in India’s growth market, the American etail giant has clearly hinted that India is going to be a more significant driver of growth. And not just on the ecommerce side. Amazon plans to bring its AWS cloud service to India in the future as well. No wonder, CEO Jeff Bezos has brought on board Amit Agarwal, to lead Amazon's India operations. Agarwal has worked at Amazon for more than 16 long years.

In just of couple of years of India operations, the company made in-roads into Tier II, III towns emerging as the first choice of customers shopping online. It was also able to increase response from mobile application which increased almost 50 percent during the year.

The ecommerce sector would grow at a rate of 10-15 percent annually, higher than the GDP growth rate, in coming years, Minister of State for Finance Jayant Sinha has said. He further added that the economy will more than double to 4-5 trillion dollars if it can achieve a sustainable growth rate of 8-9 percent over the next 10-15 years. No wonder, Amazon has set its eyes on the prospering Indian market.