E-commerce giant Amazon has announced to invest more than $35 billion in the next five years to rapidly expand its operations in India. The company has invested about 40 billion dollars in India since 2010. The new investment will be mainly spent on strengthening Artificial Intelligence (AI), cloud infrastructure and logistics networks.
Increasing competition in quick commerce
Amazon is planning aggressive investment at a time when the quick commerce i.e. 10-minute delivery market is growing rapidly. In this segment, the company is facing tough competition from companies like Blinkit, Swiggy Instamart, Zepto, Tata BigBasket and Flipkart Minutes. Amazon said that it is adding two new dark stores every day in Bengaluru, Delhi-NCR and Mumbai and its number will reach 300 by the end of the year.
Expenses are decreasing, losses are decreasing
In the last financial year, Amazon’s Indian units have reduced their losses significantly by cutting their expenses. The company’s four key units Amazon Seller Services, Amazon Transport Services, Amazon Wholesale and Amazon Pay all reported a significant decline in losses in FY25. Amazon Seller Services’ operating income grew 19% to Rs 30,139 crore in FY25, better than 14% growth in FY24.
Focus on small businesses of India
Amazon SVP Amit Agarwal said that the company is continuously investing in digitally strengthening small businesses of India. According to him, Amazon has created lakhs of jobs in the country and will focus on providing the benefits of AI and technology to small traders in the coming years.
Rapid investment in AI and cloud
In May 2023, Amazon announced an investment of $12.7 billion in India by 2030, which includes building large-scale cloud and AI infrastructure in Telangana and Maharashtra. The company says that this investment will help in connecting 1.5 crore small businesses of India with AI. Global tech companies like Microsoft and Google have also announced large-scale AI investments in India, due to which the country is rapidly moving towards becoming a tech hub.