In A First Since 2014, Amazon Ignores India In Its Earnings Call

In a first since 2014, tech giant Amazon’s India operations didn’t find a mention in the company’s earnings call and release for the first quarter ended March 31, 2023.

The move raised many eyebrows as Amazon has been regularly highlighting the fast-growing Indian ecommerce market while announcing its quarterly results. It also led to speculations about the company scaling back its presence in the market.

During its earnings call for the preceding Q4 2022 quarter, Amazon said that its business in emerging countries like India, Brazil, and the Middle East would take some time to become profitable, but these markets are on the right trajectory.

“If you look at countries like India and Brazil and the Middle East and Africa and Turkey, Mexico and Australia and a number of those types of countries, we like what we’re seeing. They take a certain amount of time. There’s a certain amount of fixed investment you have to make when you enter a new geography,” Amazon CEO Andy Jassy said. 

Amazon is one of the largest ecommerce players in India, competing with the likes of Flipkart, Nykaa, Meesho and others to reign supreme in a market which is set to have nearly 350 Mn ecommerce users by 2025. The ecommerce major has invested more than $7 Bn in India over the past decade.

However, it has been under scrutiny in the country for alleged violations of laws. Last year, it also decided to shut down its online learning vertical Amazon Academy, its wholesale business Amazon Distribution, and its food delivery unit Amazon Foods. 

Despite the growing scale and investments in India, its India units have failed to turn profitable.

Amazon India’s marketplace business Amazon Seller Services reported a 23% year-on-year (YoY) decline in loss to INR 3,649.2 Cr in FY22. At the same time, its wholesale arm Amazon Wholesale reported almost a three-fold YoY increase in its net loss to INR 480.3 Cr in FY22.

Last year, the ecommerce giant also laid off 1,000 employees in India as part of its largest retrenchment exercise globally. Before the layoffs, the company had 1,00,000 employees in India.

However, Amazon has been working hard to gain some ground on Flipkart, which leads the Indian ecommerce market. Earlier this year, the company launched a dedicated cargo fleet Amazon Air for Prime users in the country to offer faster deliveries.

Earlier this month, the ecommerce major said that its grocery delivery arm Amazon Fresh had expanded to more than 50 cities in India. 

Amazon also joined India’s digital commerce network, Open Network for Digital Commerce (ONDC), in February this year, becoming a part of the network’s logistics aspect as its logistics arm integrated with ONDC.

The ecommerce giant is also a big-time investor in Indian startups. It launched a venture fund, Amazon Smbhav Venture Fund, in 2021, with a corpus of $250 Mn. It recently expanded the fund’s focus to include sectors such as agritech, healthcare, gaming, and electric vehicles.