US retail giant Amazon has announced plans to increase its investments in one of its largest markets outside its home country. The company's CEO, Jeff Bezos, mentioned during an event in New Delhi on Wednesday that Amazon will be pouring as much as $1 billion into small Indian businesses across the country over the next five years.
The massive investment will be used to support local Indian shops, manufacturers, resellers, and brands. More than 550,000 sellers are currently using the company's platform in India, with more than 60,000 manufacturers exporting their products abroad through the online platform. Amazon is aiming to increase that number through its planned investment over the next few years.
Through its investment, Amazon forecasts that it may be able to bring in more than 10 million Indian businesses online through its platform by 2025. Bezos mentioned during the company's event in India that Amazon's initiative could greatly help Indian Prime Minister Narendra Modi's "Make in India" campaign, which aims to increase exports of Indian-made goods.
Apart from helping Indian businesses, Amazon's investment will help the company further penetrate into the lucrative market. Amazon has already committed more than $5 billion in its business in India, including expenditure in its establishment and growth.
Despite the substantial amount of money it has poured into its Indian business, the company is still locked in a fierce battle with local competitors such as Flipkart. The Bengaluru-based e-commerce firm is the country's largest online retail market, forecasted to be worth more than $200 billion by 2027. This is a good chunk of India's broader online retail market, estimated to be worth more than $670 billion.
Taking another big chunk of the country's lucrative retail market is the country's current biggest retailer, Reliance Retail. The company, which is owned by India's richest man, Mukesh Ambani, currently has nearly 11,000 stores across the country. Reliance Retail also recently launched its online platform called Jio Mart, which offers similar services to Amazon, including free grocery deliveries.
To fend off local competitors, Amazon has been trying to throw its massive financial weight into the problem, significantly increasing its physical presence. Last week, the company announced a newly formed partnership with Future Retail, one of India's largest operators of small retail stores. Through the partnership, Amazon will effectively become the official online channel for the store's hundreds of outlets nationwide. Customers can essentially order products from Amazon and then pick those items up at Future Retail's stores.
