Amazon has recently infused $404 million into its India business as it seeks to climb up to the top of the online services market.
It is currently in competition with ecommerce rival Flipkart and has just encountered the loss of hundreds of thousands of products so it can comply with the new Indian law.
At the end of 2018, India set a new regulation which imposes a ban on exclusive sales, prevents retailers from selling products on platforms they have equity in, and applies restrictions on discounts and cashback promotions.
In effect of this, Amazon had to pull an estimated 400,000 products from India to be able to meet the regulations which had kicked in from February 1, 2019. The second leading ecommerce business in India is clearly trying to make up the loss of sales by investing $404 million into its Indian business.
Its rival Flipkart, which had recently been taken over by Walmart following a $16 billion investment, had also taken a huge hit from this new regulation. As much as one quarter of Flipkart’s products could be pulled in order to comply with this new regulation, potentially causing a devastating effect on the company’s sales.