US e-commerce giant Amazon has invested over Rs 11,400 crore during FY2019-20 across its marketplace, payments and wholesale business units in India to boost its position in the country’s increasing digital commerce market.
The investments have been made even though most of the Amazon’s business units in India registered losses during the fiscal.
Data analysis from regulatory filings by various Amazon entities showed that Amazon Seller Services, Amazon Wholesale (India), Amazon Pay(India) and Amazon Transportation Services saw their losses adding up to Rs 7,899 crore in FY20.
Amazon Internet Services, which had clocked a net profit of Rs 71.1 crore in FY19, slipped into the red with a loss of Rs 20 lakh in FY20, the data showed.
The e-commerce giant has been investing millions of dollars towards promotions, building infrastructure and logistics as it woos customers to shop online, has seen its losses mount on account of higher expenses.
Filings showed that Amazon Pay’s total expenses grew 62 per cent to Rs 3,234.8 crore in FY20, while Amazon Seller Services saw its total expenses rising over 25 per cent to Rs 16,877.1 crore in the said period.
In response to a detailed query sent to the company, an Amazon India spokesperson said: “We continue to be invested in India with a long-term view enabling customers in India to enjoy the ease and convenience of e-commerce and other digital products and services”, PTI reported.
In January this year, Amazon founder Jeff Bezos had announced USD 1 billion investment in India to help bring small and medium businesses online.
Previously, the online retail giant had committed USD 5.5 billion investments in India, one of Amazon’s most important markets outside of the US and a key growth driver.
Anchal Agarwal, CEO and Founder of business intelligence platform Tofler, said with the exception of Amazon Wholesale, other Amazon entities in India have expanded by about 40-50 per cent in FY2019-20.
“Amazon International has also been funding these businesses to provide adequate capital for expansion. Amazon has increased spending on advertising and promotion of Amazon Pay, the digital payments business. They are also stressing significantly on expansion of Amazon Seller business, the marketplace that grew by 40 per cent in FY19-20,” she said. However, the losses of the group have increased on account of increasing advertising and distribution expenses, she added.
On the funding front, Amazon Seller Services – the e-commerce marketplace unit in India – was the biggest beneficiary of the fund infusion, receiving Rs 8,408 crore in three tranches. The unit saw revenue from operations rising over 42 per cent to Rs 10,847.6 crore in FY20 over the preceding fiscal.
