US online giant Amazon on Wednesday announced plans to invest a further $2 billion in India just a day after the country’s largest e-tailer Flipkart attracted $1 billion of new funds, raising the stakes in the sub-continent’s fast-growing e-commerce sector.
Amazon, which opened its Indian website in June last year, has already drawn up the battle lines by slashing prices, launching same-day delivery, adding new product categories and embarking on a massive advertisement campaign.
Amazon and Flipkart are joined in India’s $13 billion e-commerce sector by marketplace Snapdeal, fashion e-tailer Jabong, and U.S. auctioneer eBay Inc.
“With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India,” 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.”
Amazon had not previously disclosed Indian investment plans.
But on Monday, the U.S. company said it will raise its presence in the country by opening five more warehouses, almost doubling storage capacity to half a million square feet.
Amazon makes its money in India by charging third-party suppliers to use its website to sell 17 million different products including books, electronics and clothing.
The government is considering allowing foreign retailers to sell directly to customers.
It recently took a step in that direction by allowing retailers to sell online products manufactured in India.
Indian e-commerce is expanding at a staggering annual rate of 34 percent, according to researchers. That rate, however, is slower than in some other emerging nations such as China.