Owing To Aggressive Spending In India, Amazon’s International Losses Increase To $487 Mn

Online ecommerce giant Amazon has reportedly incurred losses worth $487 Mn in its international business for the quarter that ended in December 2016, while trying to sustain its position in the Indian ecommerce space.

As per an ET report, the net sales for Amazon’s international segment saw a rise of 18% to $13.96 Bn during the fourth quarter. In the third quarter of 2016, Amazon’s international unit had reported a $541 Mn loss.

Amazon has launched a slew of initiatives in the last year with an aim to capitalise upon its market share. In June 2016, Amazon announced that it would infuse $3 Bn in India in the next few years to take on its rivals. In July, it launched its biggest Fulfillment Centre in Sonipat near Delhi.

Last July, Amazon India had launched Amazon Pantry, a service that offered grocery and household essentials. In February 2016, it had also launched its grocery delivery app in India by the name Amazon Now, to allow users to order everyday essentials. A year prior to that, in March 2015, it had launched an express delivery platform for grocery called KiranaNow in Bengaluru.

Earlier in September 2016, Amazon infused $17 Mn in its Indian wholesale arm to increase the transaction of smartphones via its B2B portal, in compliance with the revised FDI norms. In December 2016, it also unveiled its Launchpad programme in India. The move is aimed at helping Indian startups to increase their customer base globally. Following that, reports surfaced that it had invested $12 Mn in its Indian wholesale vertical, Amazon Business.

Following that, it also announced the launch of its Prime Video service in India. Prime Video is an additional offering for Amazon’s Prime subscribers, including existing ones and allows users exclusive access to movies, Amazon’s original series as well as premium content from across the globe.

In the same month, reports surfaced that Amazon had again invested a fresh capital of $295 Mn (INR 2,010 Cr) in its main Indian unit, making it the single-largest capital infusion so far. The investment was made in November 2016 and marks the total capital invested in Amazon Seller Services to over $1 Bn (INR 7,000 Cr) in the last 12 months, according to regulatory filings.

Earlier last week, Inc42 reported that Amazon had sought government approval to invest $500 Mn in a wholly-owned food venture in India that will allow it to stock locally produced food items and sell them online. The ecommerce giant has filed its application with Department of Industrial Policy and Promotion (DIPP) and plans to invest the money over a period five years.