(Fixes eBay Reuters Code in the third paragraph)
* Announcement follows rival Flipkart $1 bln fund raising
* India e-commerce growing at CAGR of 34 pct -researcher
* E-commerce to be $76 bln industry by 2021 -researcher
MUMBAI, July 30 Amazon.com Inc on
Wednesday said it will invest a further $2 billion in India just
a day after the country's largest e-tailer Flipkart attracted $1
billion of fresh funds, raising the stakes in a nascent but
fast-growing e-commerce sector.
Amazon, which opened its Indian website in June last year,
has drawn up the battle lines by slashing prices, launching
same-day delivery, adding new product categories and embarking
on a high-voltage advertisement campaign.
Amazon and Flipkart are joined in India's $13 billion
e-commerce sector by marketplace Snapdeal, fashion e-tailer
Jabong, and U.S. auctioneer eBay Inc.
"With this additional investment of $2 billion, our team can
continue to think big, innovate, and raise the bar for customers
in India," Chief Executive Jeff Bezos said in a statement. "At
current scale and growth rates, India is on track to be our
fastest country ever to a billion dollars in gross sales."
Amazon had not previously disclosed Indian investment plans.
But on Monday, the U.S. company said it will raise its presence
in the country by opening five more warehouses, almost doubling
storage capacity to half a million square feet.
"It's all about who builds up scale faster and remains
relevant for the next few decades," said Harminder Sahani,
managing director of retail consultancy Wazir Advisors.
Amazon makes its money in India by charging third-party
suppliers to use its website to sell 17 million different
products including books, electronics and clothing.
The government is considering allowing foreign retailers to
sell directly to customers. It recently took a step in that
direction by allowing retailers to sell online products
manufactured in India.
Indian e-commerce is expanding at a compound annual growth
rate of 34 percent, according to a joint report by consultants
Digital-Commerce, the Internet Mobile Association of India and
the Indian Market Research Bureau. That rate, however, is slower
than in some other emerging nations such as China.
Of the $13 billion market, travel services account for about
70 percent, according to consultancy Technopak. The type of
goods sold through Amazon made up $1.6 billion of the total last
year, according to researcher Forrester, and Technopak expects
that figure to swell to $76 billion by 2021.
By comparison, e-commerce sales in China are likely to
surpass $180 billion this year, according to researcher
(Reporting by Nandita Bose and Nivedita Bhattacharjee; Editing
by Christopher Cushing)