AMAZON’S LOSSES SURGE; TO LAUNCH ECHO IN INDIA
E-commerce giant Amazon.com’s losses from its international business jumped more than five times to $724 million from the same period last year, mainly due to its investments in India, but a top company executive said the online retailer would continue to aggressively expand in a market where it has already committed to invest $5 billion.
In a post-earnings conference call with investors and analysts, Amazon’s chief financial officer Brian T Olsavsky said the online marketplace is also preparing to launch its Echo devices and its Alexa voice platform in India.
“The year-over-year difference (in losses) is primarily driven by investments—what we were within the guidance range and we continue to invest in, as I said, fulfilment capacity and logistics services, digital video, our Echo and Alexa, Echo devices and Alexa platform (in) India, the buildup at the AWS infrastructure, all the things I mentioned not to mention Prime Now and Amazon Fresh and Prime benefits,” said Olsavsky.
Earlier this year, Mint reported that Amazon has invested another ₹1,680 crore in its Indian unit as part of its commitment to invest $5 billion to expand its local business.
“We continue to invest in India. We’re very hopeful with the progress we’ve made with sellers and customers alike in India and we see great momentum and success there, so we continue to invest and we have some of our best people in that busi- ness,” said Olsavsky.
Over the past four years, Amazon has expanded at a breakneck pace in India and has almost caught up with Flipkart in terms of stand-alone monthly sales. Mint reported earlier in July that Flipkart, which started out in 2007, continues to be well ahead of Amazon in terms of overall monthly sales, including sales from its fashion units Myntra and Jabong, but Amazon is catching up fast.
In fact, in terms of other key metrics such as app downloads, desktop visits and mobile website visits, Amazon India has already overtaken Flipkart. According to stats from market intelligence firm SimilarWeb, which tracks website traffic, Amazon India’s desktop visits stood at 276 million for the quarter ended 30 June, compared to 167.6 million for Flipkart. For its mobile website, Amazon India recorded 311 million visits during the June quarter, compared to 157 million for Flipkart, according to SimilarWeb.
Amazon also has enough financial muscle-power to fight Flipkart in India and in recent interviews Amazon’s India chief Amit Agarwal has indicated that the company will spare no expense to conquer India. Amazon is desperate to dominate the Indian Internet market, after losing out to Alibaba.com in China.
In June 2016, Amazon.com Inc. had said it would invest an additional $3 billion in India after the company exhausted its earlier investment pledge of $2 billion made in 2014.
Since Amazon chief executive Jeff Bezos made that initial $2 billion investment commitment in July 2014, Amazon India has already received more than ₹15,000 crore ($2.31 billion). Mint reported last April that Amazon India, which was launched in June 2013, had doubled its authorized capital to roughly about Rs16,000 crore. Since then, Amazon has invested twice in its Indian marketplace—a Rs2,010 crore infusion in December last year and the latest in June.