TechSamvadDec 31, 2020 18:27:39 IST
US e-commerce giant Amazon has pumped in over Rs 11,400 crore (about $1.5 billion) during FY 2019-20 across its marketplace, payments and wholesale business units in India to bolster its position in the country’s burgeoning digital commerce market. The investments have been made even though most of Amazon’s business units in India registered losses during the fiscal. Data analysis from regulatory filings by various Amazon entities showed that Amazon Seller Services, Amazon Wholesale (India), Amazon Pay (India) and Amazon Transportation Services saw their losses adding up to Rs 7,899 crore in FY20 as against a loss of Rs 7,014.5 crore in the preceding fiscal.
Amazon Seller Services, Amazon Wholesale (India), Amazon Pay (India) and Amazon Transportation Services had registered losses in FY20 at Rs 5,849.2 crore, Rs 133.2 crore, Rs 1,868.5 crore and Rs 48.1 crore, respectively.
Amazon Internet Services, which had clocked a net profit of Rs 71.1 crore in FY19, slipped into the red with a loss of Rs 20 lakh in FY20, the data showed.
Filings showed that Amazon Pay’s total expenses grew 62 percent to Rs 3,234.8 crore in FY20, while Amazon Seller Services saw its total expenses rising over 25 percent to Rs 16,877.1 crore in the said period.
In response to a detailed query sent to the company, an Amazon India spokesperson said: “We continue to be invested in India with a long-term view enabling customers in India to enjoy the ease and convenience of e-commerce and other digital products and services.”
In January this year, Amazon founder Jeff Bezos had announced USD 1 billion (over Rs 7,000 crore) investment in India to help bring small and medium businesses online. Previously, the online retail giant had committed USD 5.5 billion investments in India, one of Amazon’s most important markets outside of the US and a key growth driver.
Anchal Agarwal, CEO and Founder of business intelligence platform Tofler, said with the exception of Amazon Wholesale, other Amazon entities in India have expanded by about 40-50 percent in FY 2019-20.
“Amazon International has also been funding these businesses to provide adequate capital for expansion. Amazon has increased spending on advertising and promotion of Amazon Pay, the digital payments business. They are also stressing significantly on expansion of Amazon Seller business, the marketplace that grew by 40 percent in FY19-20,” she said. However, the losses of the group have increased on account of increasing advertising and distribution expenses, she added.
On the funding front, Amazon Seller Services, the e-commerce marketplace unit in India – was the biggest beneficiary of the fund infusion, receiving Rs 8,408 crore in three tranches. The unit saw revenue from operations rising over 42 percent to Rs 10,847.6 crore in FY20 over the preceding fiscal.
Amazon Wholesale, which is the B2B unit, received Rs 360 crore funding, while Amazon Pay received Rs 2,705 crore in three tranches during FY20.
Amazon India’s marketplace, payments, transport and cloud service units saw their cumulative revenue from operations rising 47 percent to Rs 19,275.8 crore in FY20 over the previous financial year.
Amazon Wholesale (India), however, saw its revenue from operations falling from Rs 11,231.6 crore in FY19 to Rs 3,384.6 crore in FY20.
In its filing, Amazon Wholesale (India) had attributed the drop in revenue to “new government regulation resulting in lower customer adoption.” The filing noted that the company management is in process of expanding the business, and expressed confidence for future growth.
Amazon Internet Services saw revenue from operations rising 57.8 percent to Rs 4,161.6 crore, Amazon Pay (India) by 63.1 percent to Rs 1,315.7 crore, and Amazon Transportation Services by 42.7 percent to Rs 2,950.9 crore in FY20 over the previous fiscal.
With inputs from PTI.