US online retail giant Amazon would keep investing and growing in India, founder and CEO Jeff Bezos said in Washington DC on Sunday, soon after his meeting with Prime Minister Narendra Modi.
“Terrific meeting with Narendra Modi. Always impressed, energised by optimism and invention in India. Excited to keep investing and growing,” Bezos said on social networking platform Twitter.
Bezos was one of the 20-odd US business leaders who met Modi on Sunday. Among other big names were Google CEO Sundar Pichai, Microsoft CEO Satya Nadella and Apple CEO Tim Cook. All four US technology giants have been vying to grow their businesses in India, the last large open market in the world.
Bezos’ indication that Amazon’s investments in India will keep rolling comes at a time when the company has completed four years of doing business here and has cornered a sizeable chunk of the e-commerce market. The firm has committed to investing $5 billion in the country, and says half its investments have so far gone into building infrastructure.
Amit Agarwal, Amazon vice-president & country manager for India, has said the country’s e-commerce market is still in its infancy and it will take a lot more investment, not just from his company but from all players, to grow in the coming years. His thoughts reflect Bezos’ own philosophy that Amazon is still playing in the “Day 1” of e-commerce.
“We don’t really hold ourselves back based on a targeted investment. We will require a lot of investment, as will Indian e-commerce. It is still very early and we should be ready to invest for many years,” Agarwal had told Business Standard in a recent interview.
While Amazon does not break out investment figures by country, the company’s losses from its international business shot up to $541 million in the third quarter of 2016. At the time, the company attributed the loss to its accelerated investment in India. In the two following quarters, too, losses remained high – at $487 million and $481 million, in that order.
According to analysts, Amazon easily spent over $1 billion in India during 2016-17. That rate of investment is only going to go up, it says, as Indian rival Flipkart has finally found long-term investors, and Chinese rival Alibaba is stepping up its game in the country.
While India’s e-commerce market did witness a slowdown in the past year, Amazon says its growth has been healthy. In the first quarter of 2017, the company claims to have recorded 85 per cent business growth over the same quarter a year earlier. Besides, Agarwal expects the India market to grow at a double-digit rate for years to come.
“The reason I think we’re still growing at this pace is that customers are shopping more, ‘Prime’ members are spending more, new customers continue to come to us. Amazon.com at its current scale is still growing at a rate of over 30 per cent, and the US market is 100 times bigger than India. Here, it’s so early that I foresee double-digit growth for many more years to come,” said Agarwal.