These charts show why Amazon's throwing $5 billion into the Indian market

If you weren’t sure why Amazon decided to invest another $3 billion in India earlier this month, bringing its total committed investment to $5 billion, these charts should give you an answer.

India owns the world’s second largest internet population, yet its web and e-commerce penetration rates are among the lowest in the world, leaving a ton of upside potential, according to a note by market research firm Evercore on Wednesday. (Click to enlarge the charts below.)

On top of that, online shoppers in India account for only 3% of the total population, a tiny fraction compared to other developed markets like the US, UK, and Germany, who all enjoy an over 60% e-commerce penetration rate.

“…rolling these drivers forward, we project the market could exceed $250 billion in five years (from $16 billion in 2015), which we see as supportive of Amazon and Jeff Bezos’ decision to invest another $3bn (bringing the total to $5bn),” Evercore’s analyst Ken Sena wrote in the note.

Sena believes Amazon’s latest moves in India put it in a good position to win the country’s growing e-commerce market.

Amazon has aggressively increased the number of fulfillment centres in India, opening 20 over the past 2 years, the most in any international market, while designing an expansion of its Prime membership service to the market as well. The $5 billion investment also outpaces the amount of funding its two main competitors, Flipkart ($3.15 billion) and Snapdeal ($1.54 billion), have received so far, it noted.

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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