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4 Reasons to Invest in Amazon from India

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Amazon

In July 1995, Amazon launched on the World Wide Web. Amazon developed several services, including customer reviews, customized recommendations, one-click shopping, Prime, Fulfillment by Amazon Kindle Direct Publishing, AWS, Kindle, Fire, and Fire TV. The core principles of this company are a customer-centric approach rather than a competitor-centric approach, a love for creativity, and long-term thinking.

In the more than 26 years since its creation, Amazon.com (ticker: AMZN) has been mostly known by its founder and long-term CEO Jeff Bezos, who also happens to be the world’s richest person. The current Amazon share price in India is Rs. 3549 USD.

Investing In Amazon From India

Amazon, the world’s largest e-commerce company, has made its first investment in India’s wealth management industry, investing $40 million in Bengaluru-based fintech firm Small case Technologies. Amazon announced a $2 billion investment in India in 2014, followed by a $3 billion investment, for a total of $5 billion. Amazon only maintains a marketplace in India due to Indian laws, selling items through third-party vendors, although it manages the technical infrastructure and the majority of its sellers’ delivery.

Since the outbreak of the pandemic, Amazon’s sales and earnings have skyrocketed. As consumers increasingly turned to online shopping and web services for both needed and discretionary items, the e-commerce store and tech giant ensured that its services were available and superior, no matter what obstacles stood in the way. The dependability that Amazon has shown to its consumers in recent quarters, possibly when they were most in need, will undoubtedly go a long way toward ensuring customer loyalty.

4 Reasons to Invest in Amazon

Amazon earns money through a variety of methods, including retail, subscriptions, and digital services. Amazon’s main source of revenue is still retail, with the bulk of sales coming from both online and physical stores. Amazon Web Services (AWS) is the company’s greatest source of operational earnings, and it is rapidly expanding.

India Holds huge potential for Amazon

While e-commerce has risen rapidly in India in recent years, there is still a lot of room for growth, as online sales accounted for just 1.6 percent of total retail sales in India, compared to 15% in China and roughly 14% globally. By 2026, the Indian retail market is estimated to reach $1.375 trillion, with the country’s e-commerce business surpassing $200 billion, rising at a CAGR of 30% in terms of gross merchandise value. This translates to a market penetration of 13%, up from roughly 2% now. Also, Amazon share price in India cost the same as in the US, but instead of buying in dollars, one has to buy in rupees. When coming to pricing, Amazon share price in India costs around Rs. 2.6 lakhs.

Prime numbers continue to stay strong

“Prime membership continues to become better for customers year after year,” says Amazon, which has 150 million paying Prime members. “More people joined Prime this quarter than ever before,” stated Jeff Bezos, Amazon’s founder, and CEO, during the company’s latest earnings call. When compared to the same quarter last year, the number of products delivered to US consumers via Prime’s free one-day and same-day delivery more than doubled.

AWS, a strong business and diversifier

With over a million active clients, Amazon Web Services (AWS) is the market leader in cloud computing. AWS is used by firms such as Goldman Sachs, Coca-Cola, Dow Jones, etc. AWS has a massive global cloud architecture spread over 22 geographical locations.

Innovation is core to Amazon

“To be the most client-centric organization in the world,” Amazon thinks, “scientific innovation is vital.” In 2019, Amazon spent $35.93 billion on research and development, which is included under “technology and content” in the financial statement (12.8% of net sales). Cloud computing, voice-based virtual assistants, cashless Go shops, drone delivery, robotic warehouses, fraud detection, and cybersecurity depend on advanced technologies like AI, machine learning, and computer vision.

Conclusion

Amazon has always been eager to play the long game; one of Bezos’ primary mantras is to invest for the long term, as he promised his original stockholders. Although the Indian e-commerce sector is currently modest, it is rapidly expanding: From $6.3 billion in 2014 to $16 billion in 2015, sales more than quadrupled. If Amazon can replicate its success in the United States, where it controls around a quarter of all e-commerce sales, its Indian operations might be massive in a matter of years. Using INDmoney, one can buy Amazon shares in India.

In India, debt taxation applies to investments in international equity funds. If the holding time is less than three years, capital gains are taxed at the income tax rate; if the holding period is more than three years, capital gains are taxed at 20% with indexation. In comparison, although profits of up to Rs 1 lakh are exempt from long-term capital gains tax (LTCG), gains of more than Rs 1 lakh are subject to a 10% LTCG. Here you can check the other details about Amazon’s performance over the years.

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