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July 31, 2014

Amazon to pump $2bn into Indian ecommerce boost

Subcontinent could be fastest-growing market ever, Bezos believes.

By Vinod

Amazon has announced it will be investing up to $2bn into India as the ecommerce giant looks for new markets to expand into.

The company, which recently announced quarterly losses despite a 23% rise in worldwide sales, launched its Indian website last June, but has struggled to exert its usual dominance in the face of significant local competition.

It has already attempted to draw interest by cutting prices, offering same-day delivery, adding new product categories and embarking on a high-voltage advertisement campaign, but has now decided more immediate resources are needed.

"With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India," Amazon 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."

The investment will allow Amazon to by open five more warehouses in India, almost doubling storage capacity to half a million square feet.

The news comes days after Flipkart, a leading Indian ecommerce site and competitor to Amazon, announced it had raised $1bn of funds. According to the BBC, India’s total e-commerce market was worth $13bn in 2013, but online travel accounted for more than 70% of the transactions.

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