Amazon.com Inc. Chief Executive Jeff Bezos vowed to invest an additional $1 billion in the company’s Indian services, part of a charm attack in a promising but challenging business.
Mr. Bezos told a group of local Amazon sellers that the purpose is to help more small companies start trading on the company’s marketplace. The fresh funds will increase the $5 billion that Amazon has said it is spending to carve out its Indian market, a spokeswoman said.
Bezos’ statement came a day after the Indian government hit the company with antitrust scrutiny following accusations of Amazon.com, Inc.’s anticompetitive methods levelled by the CAIT. The antitrust inquiry, which also has slapped Amazon’s Indian rival Flipkart, will review the discounts that the firms offer and the promotion of private labels on their marketplaces.
With the world’s seventh-largest market as ranked by GDP, the goodwill from Bezos toward India is required. India’s antitrust watchdog just drove a probe into Amazon and Flipkart for rapacious pricing and preferred listing toward its favored brands. The Indian government has also used the last year hardening its e-commerce regulations toward international online retailers, including laws to stop massive discounting, in a bid to defend domestic rivals. Further, a trade group representing millions of small and medium-sized company owners organized protests in 300 cities across the nation against Amazon to coincide with the billionaire’s tour.
Neither Bezos nor Amit Agarwal, the head of Amazon India, discussed these matters at the Smbhav summit, meant to bring more than 3,000 small companies together to promote synergy between traders within the Amazon ecosystem. Over the years, Amazon India has increased more than 500,000 sellers in the nation and also accounts for thousands of merchants on Amazon marketplaces outside India.
India’s antitrust watchdog on Monday requested an inquiry into whether Amazon and Walmart Inc.’s Flipkart have broken competition laws. Amazon and Flipkart say they are obedient with regional laws.
After Walmart sealed its $16 billion takeovers of Flipkart in 2018, India changed its rules directing how foreign-owned online retailers — but not regional rivals — can trade goods online, pushing Amazon and Walmart to rewire their supply strings.
Regulators have also discussed the need for more stringent rules for collecting user data in India and new laws governing social media.
Meanwhile, the Confederation of All India Traders, a group that says it serves millions of online and offline domestic traders, has in recent months examined Amazon for what it calls improper practices.
In addition to his presentation at Smbhav, Bezos has also attended a meeting with India’s Prime Minister Narendra Modi and celebrities from the Bollywood film industry. On Tuesday, Bezos also paid his regards to a statue of Mahatma Gandhi in New Delhi.
When asked about Bezos’ newest billion-dollar investment to digitize India’s small and ordinary businesses, Khandelwal said that capital infusion was to support Amazon continue to trade products at a loss by giving large discounts. “They’re working to create a corrupt and false story here,” he said. “That’s not fair.”