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Amazon (AMZN) Boosts Presence in India With Prime Reading

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Amazon (AMZN - Free Report) has rolled out a new service called Prime Reading in India in a bid to strengthen its presence in e-commerce space of the country.

With the latest move, the company strives to cater to the passion for reading books among the consumers in India. Through this initiative, the company is giving free of cost access to hundreds of e-books across various sections like fiction, non-fiction, literature, romance and others via Kindle e-book reader or Kindle app.

Further, the readers can enjoy reading books in few regional languages of India like Hindi, Marathi, and Tamil.

Prime Reading in India will include several popular books such as The Immortals of Mehula, Operation Deep Strike, Harry Potter and the Philosopher's Stone, One Indian Girl, The Secret of Stones and many more.

We note that these endeavors will help the company to encourage customers to join Prime which will boost its subscriber base in the country. This in turn will aid its top-line growth. Further, the latest move is likely to boost the sales of Kindle devices and download base of Kindle app.

Coming to the price performance, shares of Amazon have returned 68.9% on a year-to-date basis, outperforming the industry’s rally of 30.9%.

E-book Market of India Holds Promise

India is developing at a fast pace which can be attributed to ongoing digitization in the country and willingness to adopt new technology among the growing population.

These factors have resulted in increasing penetration of internet and smartphone usage which in turn have led to growth in the digital media sector of the country.

According to the latest report from Statista, revenues in the e-book market of India are projected to hit $214 million by 2022 at a CAGR of 14.3% between 2018 and 2022. Further, revenues in this rapidly growing market are expected to reach $125 million in 2018.

Additionally, the e-book reader base in India is anticipated to reach 64.2 million by 2022.

We believe Amazon is well poised to cater to this high potential market with its recent launch and well performing Kindle. Further, Prime services will continue to be the key catalyst, due to its expanding video content, attractive customer friendly offers and fast delivery services.

Amazon in India

Amazon’s aggressive efforts to strengthen its business in India aid the company in sustaining momentum in the country on the back of its huge e-commerce platform, aggressive retail strategies and robust Prime.

Amazon, which is gaining momentum in India’s streaming space with the aid of its Prime services, released a comedy series in the country called Comicstaan. Further, the company’s portfolio contains original content for India like Breathe, Inside Edge and a reality show based on musicians — Remix.

Recently, Amazon acquired 49% stake in Aditya Birla Retail owned More, a grocery store chain. This will boost its market share in the grocery retail market of India. Further, the company has already forayed into the department store chain space by acquiring 5% in Shoppers Stop last year.

Moreover, the company introduced the Hindi version — most widely spoken language of India — of its online shopping website and application for mobile to make shopping easier for consumers. This is likely to strengthen its e-commerce business in India further.

Currently, Amazon’s total investment in its division in India is pegged at $4 billion with the recent addition of $386 million. Moreover, Amazon has almost 67 warehouses in India.

All these endeavors of Amazon will continue to boost its market position in India.

Zacks Rank & Stocks to Consider

Currently, Amazon carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Paycom Software (PAYC - Free Report) , Apple (AAPL - Free Report) and PayPal (PYPL - Free Report) . While Paycom and Apple sport a Zacks Rank #1, PayPal carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Paycom Software, Apple and PayPal is projected at 25.52%, 9.67% and 17.76%, respectively.

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