It seems as if Amazon is planning to pull out all stops to light up this festive season.
In a move looking to sparkle up the festivities, assured of opportunities replete after a slumber, Amazon.com Inc has invested 7 billion rupees ($95.51 million) in its Indian payments unit Amazon Pay, ahead of the upcoming festive window, as reported by business intelligence firm Tofler.
The infusion shows that the American giant is cognizant of the fact that two of the biggest festivals in the Indian calendar, Dussehra and Diwali, are falling in a one month span. Their month-long sale, which begins Oct.17, has been structured so as to entice the buyers with deep discounts on everything from clothes, smartphones, home appliances and other apparel.
It is no secret that Indians are guilty of being bumper festive shoppers. Given that during the pandemic, users will invariably opt for digital payment methods, investing in its payments services seems like a very obvious and shrewd move. By encouraging payments through Amazon Pay with a torrent of offers, including cashback and other rewards, Amazon is looking to give every excuse to its customers to splurge the cash. According to Entrackr, Amazon Pay recorded 60 million transactions in June, competing well with the likes of Google Pay, PhonePe, and Paytm.
As recently as July, Jeff Bezos-led Amazon had invested 23.10 billion rupees in Amazon Seller Services. In Jan ’20, it announced a $1 billion investment to bring more than 10 million small businesses online in India by 2025. Big commitments.
As far as Amazon Pay is concerned, it has been allotted 70 crore equity shares to its existing shareholders on a rights basis, at Rs 10 per share (in accordance with a regulatory document accessed by Tofler). The shares were allotted to Amazon Corporate Holdings Private Limited and Amazon.com.Incs Limited, the documents filed with the corporate affairs ministry showed.
As it stands, Amazon has been pumping in millions of dollars across its varied operations like marketplace, wholesale and payments business as it looks to solidify its position in the Indian market.
This festive season will also see a triple threat of sorts being played out between American behemoths Amazon, Walmart owned Flipkart, and a new, home-grown competitor on the block in Reliance’s JioMart. As the rivalry heats up in the world’s largest untapped e-commerce market, the online shopping platforms pertaining to these mammoths have already begun advertising a slew of deals and mouth-watering offers for everything from groceries and fashion to home decor.
To keep up with the demand spike, Amazon has created 100,000 seasonal jobs with plans to open 10 new fulfilment centres to warehouse products from its 650,000 sellers.
Both its major rivals have also been shoring up their operations. While Flipkart’s parent company Walmart pumped in $560.45 million in the e-commerce platform recently, it also boasts the popular digital payments service PhonePe in its arsenal. Oil-to-telecom conglomerate Reliance is also on a spree of deal-making, embarking on new commerce ventures. It has raised a staggering 377.19 billion rupees ($5.14 billion) in a month by selling stakes in its retail unit to investors including KKR & Co, private equity firm Silver Lake, and Abu Dhabi state fund Mubadala Investment Co.
It will be interesting to keep note of how Amazon develops its marketing strategies going forward, not less because of the legal notice furnished to Future Group, which was involved in a 3.38 billion asset sale to Reliance. One thing is for certain, there are going to be a lot of fireworks, hopefully, the Indian consumers make of the most of it amidst such gloomy times.
Stay tuned for more updates.