Online retailer giant to launch Instant Video and Prime Subscription Services.
By Raif Karerat
Follow @ambazaarmag
Amazon, the world’s largest online retailer, is readying a $5 billion investment to try and make India the company’s second-largest market outside of the United States.
According to the Economic Times, most of the additional funds will go toward expanding Amazon’s network of warehouses and data centers, and strengthening its marketplace platform. The long-term goal is to surpass homegrown rivals like Flipkart, India’s biggest online retailer, which was set up by two former Amazon employees in 2007.
As part of its push, Amazon plans to launch its Instant Video service and Prime Subscription Services in India later this year. It has also started conversations with music labels and producers for sourcing content, reported The Street. In December, it hired Nitesh Kripalani, a former Sony Entertainment executive, to lead its new initiatives.
Announcing a $2 billion injection of capital almost exactly a year ago, Amazon chief executive and founder Jeff Bezos said the online giant’s Indian arm had already exceeded expectations, hosting, at the time, over 17 million products on its platform.
“After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations,” he released via the Amazon India portal.
Kartik Hosanagar, a professor at The Wharton School, told the Economic Times that some of Amazon’s latest endeavors such as Amazon Prime could take longer to take off in India.
“Overall, the bet on India will pay off well for Amazon — it’s a high-volume, low-margin business in the U.S.; Amazon India will be similar. I don’t expect high profits from India but definitely good scale. So, while we shouldn’t expect Alibaba-like financials from India, Amazon will find that India nicely complements its efforts in the U.S.”