The investment was led by Singapore-based Amazon Corporate Holdings, with a token investment being made by the parent entity Amazon.com Inc, both of which were allotted a combined 915 million equity shares at a value of Rs 10 each.
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This is the first investment Amazon has made in its India marketplace unit this year, which comes amid concerns of sputtering growth in the e-commerce sector due to weak consumer sentiment and localised restrictions due to the deadly second wave of the pandemic.
The investment follows Amazon’s
recent announcement of setting up a $250 million venture fund – Amazon Smbhav Venture Fund – to back startups and entrepreneurs focusing on digitization of small and medium-sized businesses (SMBs) in India.
invested Rs 2,310 crore in Amazon Seller Services in June last year, soon after the government-mandated lockdowns had ended and the e-commerce sector was starting to see a strong recovery in sales, as consumers choose to shop more from the safety of their homes.
While a further surge in the growth momentum of e-commerce is seen in categories such as grocery and pharmaceuticals, large categories such as smartphones, electronics and fashion are estimated to be seeing a contraction due to the ongoing pandemic, and restrictions on e-commerce marketplaces in Maharashtra and Delhi.
Amazon Seller Services, which earns money by charging a commission on the sale of products on its platform, apart from other services such as logistics, warehousing and marketing, reported a revenue of Rs 11,028 crore in the year that ended March 31, 2020, and a loss of Rs 5,849 crore in the same period.