Amazon Seller Services, the India unit of US e-tail giant Amazon, saw its losses widening to Rs 4,830.6 crore for 2016-17 fiscal from the previous year, as the company ramped up investments in the country to compete aggressively against homegrown rival, Flipkart.
According to a PTI report: Amazon Seller Services had recorded a net loss of Rs 3,679.9 crore in 2015-16, as per regulatory documents filed with the corporate affairs ministry.
The company attributed the increase in net loss to investments made towards “establishing infrastructure, opening new fulfilment centres and technology advancements”.
Amazon Seller Services, however, saw its revenue rising 43 per cent to Rs 3,256.6 crore in the year ended March 2017 from Rs 2,276 crore in the previous financial year.
“The company is also investing on launching new products and new services for its customer and its sellers. The company is confident on its future growth,” the documents, sourced by PTI from research firm Tofler, showed.
When contacted, Amazon did not respond to an emailed query.
Incorporated in 2010, Amazon Seller Services renders services like marketing support, marketplace services and in wholesale trading of book readers along with accessories.
Rival Flipkart (Flipkart Internet), which also submitted its financial documents, has managed to narrow its losses to Rs 1,638.6 crore in financial year 2016-17 as against a net loss of Rs 2,306.5 crore in the previous fiscal.
The company attributed the reduction in net loss — which was to the extent of 28.96 per cent — to lower logistics, storage services and collection charges as well as decline in other expenses. Also, Flipkart Internet grew its total income by 15.46 per cent to Rs 2,253.5 crore in financial year 2016-17 from Rs 1,951.7 crore in the previous financial year.
Amazon, which is locked in an intense battle with Flipkart for market leadership in the Indian market, has been pumping in substantial funds to expand infrastructure and add solutions to enhance consumer and seller experience.
With retail giant Walmart buying about 77 percent stake in Flipkart for roughly US $16 billion, the battle is expected to intensify further.
Amazon has been infusing funds into its various entities in India, including Amazon Pay, marketplace and wholesale business. These investments have been directed towards building warehouses, strengthening logistics and increasing product assortment.
Amazon founder Jeff Bezos has committed investments to the tune of US $5 billion for the Indian market.
During a recent investor call, Amazon CFO Brian Olsavsky had said the company would continue to invest in India as it sees “great progress” with both sellers and customers here, even though as the parent entity had registered a loss of US $622 million from international operations in the first quarter of 2018.
The company is also investing significant money in marketing and promotions as it looks to bring more consumers to its online shopping platform.