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Amazon’s international losses soar in Q3 on India investments

27 October, 2017

US-based online retailer Amazon.com Inc. reported its highest-ever loss from its international operations in the three months through September, due mainly to growing investments in India.

The Jeff Bezos-led company said losses for its international business expanded to $936 million for the July-September period from $541 million a year earlier.

The third-quarter loss is also wider than the numbers in the first and second quarters—$481 million and $724 million, respectively. This totals to $2.14 billion for the nine-month period, compared with $796 million a year earlier.

This indicates Amazon’s rising expenditure in India to fend off competition from domestic e-commerce player Flipkart.

Amazon chief financial officer Brian Olsavsky, on an earnings call, said investments in India were primarily responsible for the dismal international numbers, but he remained upbeat about them.

“On the international, yeah, I can’t split it, the effects, but I will tell you again, it is international expansion and primarily in India where we’re continuing to add benefits,” Olsavsky said.

“We launched Prime there a year ago… and we’ve had more Prime members join in India than in any other country in the first 12 months. We have free shipping on 10 million items there and we’re continuing to add benefits: Prime Video, Amazon Family,” he added.

Amazon conducted its first Prime Day in India this year, and Amazon Business and Prime Music were also expanding in the country, the CFO said.

“So, a lot of positive momentum and investment [is] going on in India, [we are] very pleased with that. We also recently announced Echo and Alexa are available in India. So that should be well received by the Indian consumer base,” he added.

Amazon has continued to invest in its India business throughout 2017. In May, it introduced damage allowance for sellers to assuage their concerns over delayed payments and rising commissions. The same month, it invested $10.5 million in its payments services branch.

In July, Amazon India’s wholesale arm got $52.6 million. This was followed by a $215 million injection into its data services arm.

In September, the company launched a B2B marketplace for small and medium-sized businesses. This month, it infused $250 million more into its seller services arm.

It will soon launch its food retail business in India and has secured government approval to invest $500 million to start the new venture.

Overall, the Seattle-headquartered firm has committed $5 billion for India. It has already invested more than $2 billion in the country.

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Amazon’s international losses soar in Q3 on India investments

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