Amazon plans to invest $26 billion to expand and improve its operations in India.
Funds within the framework of the initiative to strengthen the position of the e-commerce giant in the Indian market will be allocated gradually. The process will be completed by 2030. The company made this decision against the background of growing competition with Walmart.
The media reports that the investment plan for the Indian market was approved and approved for implementation after the meeting of Amazon CEO Andy Jassy with Indian Prime Minister Narendra Modi during his visit to the United States. Probably, as a result of the negotiations, the e-commerce giant received guarantees of facilitating or, at least, the absence of any obstacles to business development.
Andy Jassy did not give details of the investment plan. At the same time, shortly before he meets with Narendra Modi, it was reported that Amazon Web Services will invest $ 12.9 billion in India and another $6.5 billion in this country will be spent on improving and expanding e-commerce activities.
The media reported that during his visit to the United States, the Indian Prime Minister held meetings with several heads of major technology companies, including Tim Cook from Apple, Sundar Pichai from Google, Satya Nadella from Microsoft, and Sam Altman from OpenAI. Narendra Modi said that after his previous American visit, which took place nine years ago, the two countries have increased and strengthened cooperation in the defense and strategic spheres. He noted that India and the United States are cooperating to increase confidence in the new technology industry and solve complex problems in trade.
Experts say that the intensification of Amazon’s investment in the Indian market is partly a response to the fact that the competitor, which is Walmart, has focused on this region and plans to use the Flipkart e-commerce platform and the PhonePe payment provider to double the annual sales volume in the local market over the next five years, to 200 billion dollars.
Walmart Chief Financial Officer John David Rainey said at an investor conference in June that the plans for growth in India are realistic in terms of the possibility of their implementation. In 2023, the company announced that the Shopsy discount resale app from Flipkart is expanding both in terms of the number of operations and terms of the geography of implementation. The app was downloaded 175 million times last year.
Amazon and Walmart are preparing to fight dueling savings events next month. Amazon’s Prime Day will begin on July 11 this year. A day earlier, Walmart will give its Walmart+ subscribers access to a weekly savings promotion. The result of these decisions will demonstrate the prospects of reducing the gap in the share of consumer spending, which is increasing between competitors. In the context of this situation, Walmart is the losing party.
Experts say that psychological attitudes existing in the minds of consumers and most cases formed based on material and financial factors are crucial when choosing a brand with which a person will interact within the framework of meeting a certain need. Statistics show that 44% of American consumers believe that Prime offers are better than Walmart+ offers. This belief is in a certain sense a programmed perception, but at the same time, its primary basis is in the plane of pragmatic considerations pursuing material benefits in the face of the problem of rising retail prices.
Double-digit preference for Prime Day over Walmart + Weekend means that Walmart won’t have enough days of the expanded economy to regain the positions lost in the process of competition.
As we have reported earlier, Amazon Tests Dine-In Payments in India.