In a post earnings conference call with analysts, Brian T Olsavsky, Amazon’s chief financial officer, said the online marketplace has made significant investments in building up fulfilment capacity and logistics services, apart from launching its digital video in India.
Amazon will soon launch two of its most popular devices — Echo and Alexa voice platform — in India. In a post earnings conference call with analysts, Brian T Olsavsky, Amazon’s chief financial officer, said the online marketplace has made significant investments in building up fulfilment capacity and logistics services, apart from launching its digital video in India. While Alexa is an intelligent personal assistant developed by Amazon, Echo is a smart speaker from Amazon’s stable. Amazon is looking to increasingly bet on its two new products to garner more market share in India where it is aggressively pumping funds. In its results released on Friday, Amazon said that its international business losses increased by 436% to $724 million for the June quarter of FY17 primarily on account of its heavy investments in India where it continues to aggressively gain market share by committing to invest $5 billion.
Amazon had recently pumped in $250 million (Rs 1,680 crore) in its India business unit. Beside investing in marketplace, it has also infused funds into its payments platform and wholesale units. Amazon has also recently pumped in $214.6 million (about Rs 1,381.6 crore) into the Indian arm of its data services operations.
Despite massive losses, Amazon still continues to invest in India. Olsavsky, said, “We continue to invest in India. We are very hopeful with the progress we have 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 business”. Amazon India’s e-commerce platform saw its losses jump to Rs 3,572 crore for FY16, compared to Rs 1,724 crore for FY15, while revenue more than doubled to Rs 2,275 crore for the same year, up from Rs 1,022 crore in FY15.
Amazon is locked in an intense battle with India’s homegrown e-commerce Flipkart. The battle between Flipkart and Amazon got a new lease of life after Flipkart raised $1.4 billion from eBay, Tencent and Microsoft in April this year. Flipkart is also likely to get further fund infusion from Softbank.
Amazon is also not taking the competition with Flipkart lightly, as can be guaged by its SEC filing on Friday.
“As international e-commerce and other online and web services grow, competition will intensify. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names. We may not be able to hire, train, retain, and manage required personnel, which may limit our international growth,” Amazon stated.