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Exclusive: Amazon to pump in $63 mn to beef up logistics ahead of festive season

08 August, 2017

Amazon Transportation Services Pvt. Ltd, the logistics arm of e-commerce firm Amazon India, is set to receive Rs 400 crore ($62.75 million), filings with the Registrar of Companies show.

Though the identity of the investor remains undisclosed, it is well known that Amazon India typically does not rely on external sources for funding.

The decision to raise this sum, which will be used to expand business operations, was taken via a board resolution on July 7. It was accompanied by an increase in the company’s authorised share capital from Rs 475 crore to Rs 800 crore.

Previous RoC filings show that Amazon’s logistics arm received Rs 207 crore in March this year and Rs 67 crore in September 2016.

E-mail queries have been sent to Amazon seeking confirmation on the fund infusion.

The fund-raising exercise comes just ahead of the festive season, a time when the e-tailer traditionally engages in a no-holds barred sale battle with rival Flipkart.

Amazon is also doubling storage capacity this year by adding 14 new fulfilment centres as it looks to reduce delivery times in a market where quality of service is fast becoming a differentiator.

Last week, it set up its 38th fulfilment centre in Madhya Pradesh and announced that it will set up an additional three in Hyderabad and the suburbs of Gurgaon and Ahmedabad. This would take the total number of fulfilment centres to 41 by Diwali. Last month, The Economic Times reported that Amazon was also looking to offer its logistics services to sellers beyond its own platform, and a pilot project was already underway.

Rival Flipkart has also been developing its logistics arm to meet its warehousing needs. Earlier this month, The Economic Times reported that it has built nine warehouses to handle large appliances and ensure next-day deliveries during the festive season.

Amazon has made no bones about its intent to capture the Indian e-commerce market, having pumped $5 billion into its Indian e-commerce arms. Recently, the company also received approval from the Department of Industrial Policy and Promotion to invest $515 million in India’s food retail sector.

Amazon Retail India Pvt. Ltd, the entity registered for its food-retailing business, will reportedly commence operations by Diwali.

The e-tailer is deepening its India play, going beyond e-commerce. It has ventured into the beauty services segment, launched video-streaming service Amazon Video Prime, and introduced a programme for startups, Launchpad, to market its products to customers across the country.

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Exclusive: Amazon to pump in $63 mn to beef up logistics ahead of festive season

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