E-commerce buzz: Amazon’s fresh $3 billion bet; Hike’s Tencent pitch and more

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Mint presents a wrap of what kept the e-commerce and the start-up world busy during the week. How did the top firms look at the Indian market in terms of investment, who is looking to raise more funds and why the market gave a bumpy ride to some.

When Amazon made a fresh bet on India

Even as institutional investors are wary of pumping in money into new and existing start-ups, Amazon.com Inc, the world’s largest online retailer, announced that it will invest an additional $3 billion in India after the company exhausted its earlier investment pledge of $2 billion. The move piles additional pressure on local rivals Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd) to keep raising fresh funds.

The announcement came as an indication that the US firm is going for the kill in its market share battle with Flipkart and Snapdeal, and is a signal to Alibaba Group Holding Ltd which recently announced its entry into India.

Furthermore, the key aspect to look at is where the firm will invest the money after the government came up with new regulations for e-commerce in March. The new rules ban marketplaces from influencing product prices. As a result, Amazon has been forced to stop spending on discounts and ads—the biggest sources of expenditure. Along with Amazon other online retailers have also suspended their sales in order to comply with the new e-commerce regulations.

Even as all this happened, Amazon India in its effort to push its offline presence, tied up with assisted e-commerce firm Storeking. The company has increased its offline shopping initiative to more than 1,000 outlets in an attempt to increase its reach in small towns across the Indian hinterland.

It launched its offline shopping initiative called Udaan in late 2014 under which it selects and trains local entrepreneurs in smaller cities and towns as well as in pockets of metros where Internet connections aren’t easily available.

Flipkart revamps team, again

The country’s largest e-commerce company, which was in the news early this year for its mega team restructuring, has again revamped its tech leadership team.

Flipkart moved engineering head Peeyush Ranjan to the role of group chief technology officer. It has hired former Amazon.com Inc. and Micromax Informatics executive Ashish Agrawal as senior vice-president of engineering. Agrawal, who will join Flipkart this month, will be the engineering head of the consumer shopping experience.

It has also promoted Hari Vasudev, another senior vice-president of engineering, to head the technology function of two of its most important businesses—marketplace and Ekart.

Mukesh Bansal and Ankit Nagori, who were among the most powerful executives at Flipkart, resigned early this year to start their own ventures. In January, Flipkart had named Binny Bansal as its new chief executive, replacing Sachin Bansal.

Fund-raising talks

Mint reported on Wednesday that Hike messaging app is in talks with China’s Tencent to raise funds in order to catch up with the market leaser WhatsApp.

Ratan Tata-backed Bluestone too is in talks to raise Rs 200 crore, reported Mint on Wednesday.

Uber’s bumpy ride in India

Even though cab aggregator Uber has managed to increase its market share in India, the journey has been anything but smooth. The company has found itself on the wrong side of the law on multiple occasions. Mint touched upon the key issues that led to the bumpy ride of the global firm in the Indian market.

Paytm to invest Rs 600 crore on branding, marketing in 2017

Paytm which last fiscal spent over Rs500 crore on branding and marketing, on Tuesday announced an increased budget of Rs 600 crore for financial year 2017. Given the general slowdown in the start-up investment scenario, the increased budget of Paytm may come as a surprise to a few. However, according to experts, e-commerce companies are becoming more prudent in their spending behaviour. And unlike the last three years when companies would invest heavily in brand building and customer acquisition, now the target is expected to be more on the lines of return on investment.