Amazon Bullish On Expansion In India; Announced Q2, 2016 Results

Amazon has gained $30.4 Bn in revenue and earnings of $1.78 per share in Q2, 2016, thereby beating the analysts expectations of $29.54 Bn in revenue and earnings of $1.11 per share. As said, it is the fifth straight profitable quarter for the company, credited mainly to its cloud computing service, Amazon Web Services (AWS).

Amazon Business now serves more than 400K businesses and generated more than $1 Bn in sales in its first year. Amazon Business has more than 30K third-party sellers who fulfill over half of Amazon Business orders.

Although Amazon’s international business has struggled with profitability, it recovered losses since last year. This quarter the losses stand at $135 Mn, a 40% low from previous $189 Mn in Q2, 2015.

In its earnings release, Amazon CEO Jeff Bezos touted the company’s expansion into India, a market it committed to invest $5 billion last quarter. Amazon.in was the most visited ecommerce site and the most downloaded mobile shopping app in India in the second quarter, according to third-party reports.

In June this year, it also fuelled additional $200 Mn in its Indian unit, and also invested in six new fulfillment centres (FC’s) to meet the demands of its seller base in the country.

Recently, Amazon also launched Prime in India. With Prime, Indian customers in over 100 cities can enjoy unlimited free one-day and two-day delivery on hundreds of thousands of eligible products. Sellers using Fulfillment by Amazon now automatically provide customers with unlimited fast, free delivery. It will soon be launching Prime Video, thereby offering Prime members exclusive access to Amazon Original Series and Movies, and premium movies and TV shows from Indian and global content providers.

“It’s been a busy few months for Amazon around the world, and particularly in India – where we launched a new AWS Region, introduced Prime with unlimited free shipping, and announced that Prime Video is coming soon, offering Prime members in India exclusive access to Amazon Original Series and Movies – including original content featuring top Indian creators and talent.  The team in India is inventing at a torrid pace, and we’re very grateful to our Indian customers for their welcoming response,” said Jeff Bezos.

For Q3 2016, Amazon expects net sales of between $31 Bn and $33.5 Bn or growth of between 22% and 32%. This guidance anticipates approximately 30 basis points of favorable impact from foreign exchange rates.