Amazon Q4 hit by Diwali timing
Amazon, the world’s largest online retailer, said its December quarter (Q4) revenue took a hit as the Diwali season moved more into the third quarter. The other factor which affected sales was Japan’s consumption tax increasing from 8 per cent to 10 per cent.
“Those two items impacted the Q4 growth rate negatively by about 300 basis points,” Brian T Olsavsky, senior vicepresident and chief financial officer, said on Thursday.
“The Diwali timing, which has a very large swing factor on international revenues, moved more into the third quarter in 2019 versus 2018.
So, it was a help to Q3 and a penalty to Q4.”
For Q4, Amazon’s net sales increased 21 per cent to $87.4 billion, compared with $72.4 billion in Q4 of 2018. For all of 2019, the rise was 20 per cent to $280.5 billion, compared with $232.9 billion in 2018.
During his India visit this month, Jeff Bezos, the founder and chief executive, pledged to invest $1 billion (a little over ~7,000 crore) to help digitise traders and micro, small, and medium-sized businesses (MSMBS) across India, with the goal of bringing more than 10 million MSMBS online by 2025.
The firm said there were about 550,000 sellers on the Amazon India marketplace. A little more than 60,000 Indian manufacturers and brands were exporting their ‘Make in India’ products to customers worldwide on Amazon.
The company said it expects the new $1-billion investment to enable $10 billion i n cumulative Indian export by 2025.
“There are a lot of different facets (of ) those types of investments. I won’t go into too much for specifics but a lot of work is being done there,” said David W Fildes, director of investor relations, during the earnings call.
Amazon claims it has, since launching ‘amazon.in’ in 2013, created more than 700,000 direct and indirect jobs in India.
“That team over there continues to do a great job locally, of taking a lot of the tenets that we’ve had at Amazon around innovation building and really run with that over there,” said Fildes. “They have done a great job of coming up with some interesting and new services and features that, I think, are specific to that region.”