New Delhi: On Tuesday Flipkart announced that it raised a fresh round of funding worth $1 billion. This is seen as a part of Flipkart's aggressive scale up after Amazon's rapid expansion in India that has heated up competition.
Now a day later, Amazon announced that it will invest an additional $2 billion "to support its rapid growth and continue to enhance the customer and seller experience in India."
"After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations," said Jeff Bezos, founder and CEO of Amazon.com in a press statement. "We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India."
Flipkart, Amazon's biggest competition in India, was founded in 2007 by two former Amazon employees.
Amazon, which entered India last June, has taken on rivals by slashing prices, launching next-day delivery, adding new product categories and embarking on a high-voltage advertisement campaign.
"At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales," said Bezos.
The Indian e-commerce market was worth $13 billion in 2013, with online travel accounting for over 70 percent of consumer e-commerce transactions. Online sales of retail goods totalled $1.6 billion in 2013, according to research firm Forrester, and are expected to reach $76 billion by 2021. By comparison, China's business and consumer e-commerce sales may surpass $180 billion this year.
(With inputs from Reuters)
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