Amazon is Prepared to Burn up to One Billion USD Annually in India to Dethrone Rival Flipkart
In the quarter that ended September, 2016, Amazon reported a $541 million dollar loss from its International
businesses, largely due to the investments it is making in India. The company’s aggressive spending and deep discounting
isn’t just affecting large rivals Flipkart and Snapdeal but also smaller players such as Voonik, Zivame, Koovs, Lime-Road,
StalkBuyLove and Craftsvilla, who play in the online-fashion space that usually yields high margins. Earlier, Amazon spent
a lot of capital to build warehouses and infrastructure, but in 2016 they have increased spending on customer acquisition.
With the results, Flipkart and Ola's were at the forefront of a debate saying that Indian-origin startups need policy support to
counter "capital dumping" by foreign rivals. While free and fair competition is a must to benefit the consumers or end users,
it is also to be taken into considerations that Indian-origin startups not only remain competitive but also be able maintain a
sustained growth in terms of revenue and profit generations for themselves. Hence, it will not be out of place to agree that
Indian-original startups need some sort of direct or indirect policy support from the Government so as to remain competitive
against their foreign rivals.
Keywords - Amazon, Flipkart, Snapdeal, Warehouse, Discounting, Advertisement, policy support from government.