Amazon Battling for Position in India

Amazon India is making good use of the $2 billion Jeff Bezos promised to invest in the market.

True to his word, Amazon has launched a new online payment service, and is rumored to be in talks to buy online fashion retailer Jabong.

Amazon India’s new payments service, ‘Pay with Amazon,’ targets small and medium sized businesses looking to streamline and simplify the payment process for their customers.

‘Pay with Amazon’ will give online customers the option to pay for their items with their Amazon account, meaning businesses will be able to focus on their own operations and less on payment processing. The service is available through web browsers and is optimized for Android, iOS, and Windows mobile platforms.

Amazon describes the service as a “trusted payment bridge between customers and sellers” designed to help small businesses grow. Among the early adopters of ‘Pay with Amazon’ were Shopyourworld.com, Fommy.co.in, Bayoye.com, and Webmallindia.com

Amazon is also looking to take advantage of India’s growing online business by acquiring fashion retail player Jabong. Bezos recently estimated that sales of online goods sold in India were over $1 billion, 25% of which are fashion retail purchases. Jabong sports a 25% market share of online fashion retail, and is reported to be looking for a purchase price of $700 million.

The move to buy Jabong would come soon after Flipkart, Amazon India’s biggest competitor, acquired Myntra - India’s largest online fashion retailer - for $370 million. India appears to be Amazon’s best chance for expansion in Asia. China, the largest economy in the area, is dominated by online retailer Alibaba.

Amazon used a similar strategy for expansion in the U.S. in 2009 when it acquired fashion retailer Zappos.