Amazon India Losses Grow In FY20 As Flipkart Cuts Losses

Amazon India Deeper In The Red In FY20 As Flipkart Reduces Losses

SUMMARY

Amazon reported a revenue of INR 10,847.6 Cr, with a loss of INR 5,849.2 Cr

The company spent about INR 16,877.1 Cr in FY2020 and invested in technology advancements

Flipkart, on the other hand, reported a 12% growth in its revenues to INR 34,610 Cr and a 18% reduction in losses

The online marketplace unit of ecommerce giant Amazon India, Amazon Seller Service, has widened its after-tax losses from INR 5,685.5 Cr to INR 5,849.2 Cr in the financial year 2020. However, the company’s revenue has grown by 43% from INR 7,593.5 Cr to INR 10,847.6 Cr in the same time period.

According to Amazon Seller Services’ regulatory filings, the company saw a 25% spike in its expenses. The company spent about INR 13,463.1 Cr in FY2019 and INR 16,877.1 Cr in FY2020. ‘The company continued to invest in opening new fulfillment centers, and technology advancements,’ the filings said.

Besides this, the company’s employee benefits expenses increased to INR 1,382.9 Cr from INR 1,183.3 Cr, finance cost rose to INR 108.2 Cr from INR 15.5 Cr. Amazon also categorised INR 13,296.3 Cr as ‘other expenses’, under which it spent INR 2,330.7 Cr on advertising.

“The company is confident in its future growth,” the regulatory filings read.

Meanwhile, Amazon Internet Service, the Indian unit of cloud computing giant Amazon Web Services, also reported a loss in FY20. It saw 58% spike in its revenue to INR 4,215.9 Cr in the financial year 2020, with INR 4,178 Cr in expenses. But while it had ended FY2019 with a net profit of INR 71.1 Cr, AWS recorded a net loss of INR 20 Lakh after tax in FY20. Notably, it reported profit before tax of INR 37.6 Cr for the year.

How Amazon Stacks Up Against Flipkart & Snapdeal In FY20

Amazon Seller Services competes with Walmart-backed Flipkart, Snapdeal and Paytm Mall.

Amazon’s biggest rival Flipkart reported a 12% growth in its revenues to INR 34,610 Cr and a 18% reduction in losses to INR 3,150 Cr. Flipkart’s fashion retail subsidiary Myntra saw its revenue slip nearly 6% to INR 4,262 Cr in FY2020. It cut its losses by 25% to INR 874 Cr in the same time period.

Flipkart’s income primarily came from the wholesale sale of products, unlike Flipkart Internet, the marketplace unit of the ecommerce giant that earns its revenues from commissions from vendors to facilitate sale of products, for advertising, logistics, warehousing and other such services.

During FY20, the company allotted total equity shares worth INR 4,455 Cr to Flipkart Private Limited Singapore and its total expenses for the financial year stood at INR 37,760 Cr.

In the financial year 2020, Snapdeal had reported a revenue of INR 916 Cr, leading up to losses of INR 274 Cr. Last year, the company had reported a loss of INR 186 Cr, which means that the company widened its loss margins by 47%. Interestingly, the company’s earnings through operations have increased from INR 839.4 Cr in FY2019 to INR 846.4 Cr in FY2020 despite the drop in overall revenue.

Paytm Mall, on the other hand, has reduced its losses by 60% to INR 479 Cr in FY2020. The company also reported a 27% decrease in its revenue from INR 968 Cr in FY2019 to INR 703 Cr in FY2020. In FY2018, the company had reported a revenue of INR 775 Cr.