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Did Amazon Topple Flipkart from Its Top Seat in India?

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Amazon reported better gross sales last month 

Amazon (AMZN) has toppled Flipkart to become India’s biggest e-commerce player last month, according to a report from Livemint citing people familiar with the matter. Amazon’s Indian subsidiary reached gross sales or gross merchandise value of more than 20 billion Indian rupees (about $298.3 million) in July, while Flipkart’s gross sales remained below 20 billion rupees.

That said, gross sales from Flipkart-owned Myntra and recently acquired Jabong were not considered in the computation. Including sales from these two sites, Flipkart still remains the top e-commerce company in India.

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In either case, Amazon has become a lot more aggressive, gaining market share in this fast-growing segment by making large investments. Recently, the company stated that it will invest an additional $3 billion in India to ramp up its growth. This comes after the company already committed to invest $2 billion in 2014.

Regulatory hurdles in India could hurt growth

Amazon expects India to be its largest market outside of the United States (SPY) and has even called India the next trillion-dollar market, according to a report from Fortune. Despite this strong growth potential, e-commerce companies are facing a few regulatory risks in India, which could hurt sales. According to new regulations, marketplaces in India won’t be allowed to garner more than 25% of their sales from one seller.

Another regulation states that these companies can’t influence product prices by offering deep discounts. These regulations will impact all e-commerce players in India, including Flipkart, Snapdeal, eBay (EBAY), and Amazon.

In the next part, we’ll look at Amazon’s efforts in music streaming.

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