SUMMARY
Amazon Seller Services, which runs Amazon’s marketplace unit, saw its net loss decline from INR 4,748.1 Cr in FY21
Amazon Seller Services reported an over 32% increase in operating revenue to INR 21,462 Cr in FY22
Meanwhile, Amazon Pay India’s loss rose about 15% to INR 1,740.8 Cr, while logistics arm Amazon Transportation’s loss jumped over 38% to INR 95 Cr
Amazon India managed to bring down the net loss of its marketplace business in the financial year 2021-22 (FY22) even as the loss for its logistics and payments arms widened during the year.
Amazon Seller Services, which runs its marketplace unit, narrowed its loss by 23% to INR 3,649.2 Cr in FY22 from INR 4,748.1 Cr in FY21.
On the other hand, its payment and financial services distribution arm Amazon Pay India’s loss rose about 15% to INR 1,740.8 Cr, while its logistics business arm Amazon Transportation’s loss jumped over 38% to INR 95 Cr in FY22.
The bottom line of Amazon India’s business units continued to take a hit despite the increase in their revenue.
Amazon Seller Services reported an over 32% increase in its operating revenue to INR 21,462 Cr in FY22 from INR 16,200.3 Cr in FY21.
The standalone marketplace business’ total revenue stood at INR 21,633.4 Cr.
The ecommerce giant’s marketplace business in India competes with Walmart-backed Flipkart, new-age social commerce platforms like Meesho, along with marketplaces owned by Reliance and Tata. Amazon Seller Services’ revenue sources include its product sales, platform fees collected from third-party sellers, subscription services, and sales of advertising services.
Meanwhile, the total income of its payments and logistics arms increased by 16% to INR 2,052.4 Cr and 12.6% to INR 4,581.2 Cr, respectively, in FY22. The total income of the two segments stood at INR 1,769.1 Cr and 4,068.6 Cr, respectively, in the prior fiscal year
In FY22, the total expenses of its logistics and payments units stood at INR 4,678 Cr and INR 3,793.2 Cr, respectively.
Amazon Pay India runs Amazon Pay wallet, operates Unified Payments Interface (UPI) offerings, among other services.
In terms of expenses, Amazon Seller Services reported an over 19% increase in its total expense to INR 25,282.6 Cr in FY22, with transportation distribution expenses contributing a significant 26.7% to the expenditure at INR 6,751.2 Cr.
It was followed by legal professional charges, which contributed about 14% at INR 3,498.5 Cr in FY22.
Amazon India has repeatedly come under the Indian government’s scrutiny for issues related to alleged anti-competitive practices. In April this year, the Competition Commission of India (CCI) raided the offices of two sellers of Amazon India for alleged violation of competition law.
Meanwhile, brokerage Bernstein in a recent report said that profitability remains elusive for Amazon India despite being in the market for nearly a decade.
The ecommerce giant is not only lagging behind its major Indian peers like Flipkart and Reliance but also players like Meesho in various aspects despite over $6.5 Bn investment in the country, it said.
However, the brokerage noted that the issue was partially also due to the “highly nationalised” regulatory market in India that prioritises local businesses over international entrants.
Amazon reported a loss of $1.7 Bn in its overall international business in the quarter ended June 30, 2022, but said that it will continue investing in the global markets, including India.
