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Amazon India Suffers Major Loss

Amazon India Suffers Major Loss

| On 08, Jan 2019

There is no doubt that Amazon is one of the most successful e-commerce platforms to have ever graced the virtual world. It is popular among people all over the world as they have discovered online shopping through this website.

When Amazon first launched, people had not warmed up to the idea of making purchases online because they did not know how it would turn out. However, once consumers realised that they could save a lot of money if they switched to online shopping, they began to try out different things. Today, all of us depend on Amazon for almost everything we need.

Amazon’s Losses:

Amazon has expanded the business slowly but steadily in the country. Once it became international, it also came to India where it turned out to be a huge success. However, since competition is getting tougher by the day, more and more e-commerce giants are preparing for a tough fight. Amazon Seller Services is responsible for making the sure Amazon gets all its supplied in India. It is like a local marketplace for the website in India. This year, they reported, Amazon had a suffered a massive loss amounting to Rs 6,290 crore, which is almost close to a $1 billion setback.
The calculation was made for the financial year that ended back in March 2018. It marked a jump of 30% when compared to the data collected last year.

With the release of this information, one finds that the total loss suffered by the top three online shopping companies in India amounts to Rs 11,300 crore during the last financial year. It will be interesting to see how these companies take their game forward. The other two popular websites, Flipkart and Paytm Mall, have together incurred a loss of Rs 5,000 crore.

The latter is the e-commerce site for Paytm which is a popular payment channel in India. All these companies are trying to survive in the market, and are hence ready to compete no matter what it takes.

In the financial year that ended in March 2017, Amazon Seller Services suffered a loss of Rs 4,830 crore. On the other hand, the payment businesses of Amazon India and PhonePe by Flipkart found themselves Rs 1,150 crore short of breaking even that year. During the last fiscal year, Amazon India’s revenue went up by nearly 60%. The website gets most of its revenue by offering marketplace services that can connect third-party sellers and buyers.

Why is Amazon investing in India?

Since Amazon lost its popularity in China to an online shopping website called Alibaba which sells wholesale items, the e-commerce giant has been trying harder to cement its position in India. They have made an investment of $5 billion in their business in India, and now they are trying to make the best of it. A lot of it has already been spent in trying to make Amazon more accessible to people. Amazon India found that their expenses went up to Rs 11,305 crore in the last year when they started their venture. They spent Rs 2,109 crore on promotions and advertisements alone.

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