Amazon India Marketplace’s Loss Widens 33% To INR 4,854 Cr In FY23

After narrowing its loss in FY22, Amazon Seller Services, the marketplace business of Amazon India, saw its standalone net loss widen 33% to INR 4,854.1 Cr in the financial year 2022-23 (FY23) from 3,649.2 Cr in the prior year.

In comparison, the entity’s operating revenue increased merely 3.4% to INR 22,198 Cr during the year under review from INR 21,462 Cr in FY22.

In FY22, Amazon Seller Services’ loss had declined 23% year-on-year (YoY) while operating revenue had jumped 32% compared to FY21.

The company earns a majority of its revenue from the sale of marketplace services. It offers programmes that enable sellers to sell their products through its internal portal and fulfil orders through it. Besides, it earns from subscription services, which include fees associated with Amazon Prime memberships and access to content such as digital video, digital music and e-books.

Amazon Seller Services also earns from other marketplace-related services such as sales of advertising services as well as from royalties – revenue from licensing of digital content.

Including the above-mentioned revenue sources and other non-operating income, the entity’s total revenue stood at INR 22,429.5 Cr in FY23.

Ecommerce giant Amazon’s marketplace business in India competes with Walmart-backed Flipkart, the marketplaces owned by Tata and Reliance, as well as new-age platforms like Meesho and Nykaa, among others.

Earlier this year, during Amazon’s Q2 2022 performance announcement, the US-based ecommerce major said that its businesses in emerging countries like India, Brazil, and the Middle East would take some time to become profitable but these markets were on the right trajectories. 

Meanwhile, the India business did not find any mention in the company’s statements following the release of the financials for the quarter ended March 31, 2023, raising many eyebrows.

How Did The Company Spend?

Amazon Seller Services’ total expenses jumped 7.9% to INR 27,283.6 Cr in FY23 from INR 25,282.6 Cr in the previous fiscal.

Employee Benefit Expenses: The entity’s employee benefit expenses accounted for 10.2% of the total expenses during the year under review and increased to INR 2,794.7 Cr from INR 2,192.7 Cr in FY22.

In that, the company spent INR 1,928.6 Cr on salaries, bonuses, and wages. Amazon Seller Services’ employee share based payment (equity settled) increased to INR 690.5 Cr in FY23 from INR 559.4 Cr in the previous year.

Transportation Distribution Expenses: At over 25%, delivery charges accounted for the biggest chunk of total expenses of Amazon Seller Services in FY23.

The company spent INR 6,863.1 Cr on delivery charges in the reported period as against 6,751.2 Cr spent in FY22.

Advertising Promotional Expenses: The company managed to lower its advertising promotional expenses to INR 3,209 Cr in FY23 from INR 3,426.4 Cr in the prior fiscal.

Legal Professional Charges: Amazon Seller Services’ expenses in this bucket grew almost 3% YoY to INR 3,598.8 Cr.

Miscellaneous Expenses: The company’s miscellaneous expenses, which include payment processor fees, reimbursement for damages of fulfilled inventories, exchange differences, allowances for doubtful debts, among others, grew over 9% YoY to INR 4,875.8 Cr in FY23.