Aiming to get an even bigger chunk of market share of the Indian e-commerce ecosystem, Amazon has committed to pump in another $17.25 million(or Rs. 115 crore) in its wholesale arm — Amazon Wholesale(India). The procedings were first reported by ETTech, based on regulatory filings.
Amazon Wholesale, set up in the year 2013, is running the business portal of the company. Apart from that, it also acts as a seller of exclusive products, including smartphones for Amazon India portal.
With the investment of this Rs. 115 crore, the total capital raised by the wholesale unit has now risen to Rs. 155 crore(about $23 million). Furthermore, the funding comes at a time when China’s Alibaba is also aggressively growing its B2B offering in India.
The company’s wholesale arm is currently serving small and medium sized business(SMBs) in just Bengaluru and Mangaluru. It has listed products in the categories of office supplies, stationery, housekeeping supplies, kitchen, health, personal care, food and beverages.
It also played a pivotal role as a source of high-volume products like smartphones for merchants on its online marketplace. However, it is now cutting down smartphone sales through Cloudtail, in order to comply with the new government norms. The new norms caps single seller on a marketplace at 25% of total sales.
Cloudtail, one of the largest seller on the Amazon India portal, is a joint venture between Amazon and Catamaran Ventures, which is a private investment vehicle of Infosys founder NR Narayana Murthy. For Cloudtail, smartphones accounted for almost half of its overall sales.
Some reports suggest that the company has directed device makers to bill the proceedings to Amazon Wholesale (India), instead of billing products and inventory directly to Cloudtail. This has also increased the requirement of working capital.
Recently, Amazon India launched its own private label for Men, named ‘Symbol‘. Furthermore, the company is planning to launch at least six private labels by the end of this year.
Along with this new initiatives, the company is also in a race to acquire digital broadcasting rights of Indian Premier League (IPL), in order to boost its Prime subscribers userbase.
Amazon Business has more than 10,000 sellers in Bengaluru only. The market opportunity in B2B commerce is also expected to be larger than B2C. According to a Walmart report of 2014, India’s B2B ecommerce industry will grow to $700 billion by 2020. As per Goldman Sachs, the B2C segment is estimated to reach $103 billion by 2020.