Amazon's India losses double to Rs3,572 cr in FY16 as company boosts spending
26 Dec 2016
US e-commerce giant, which is pumping global gains to its bolster its loss-making Indian operations, saw its losses in India more than double to Rs3,572 crore from Rs1,724 crore in a 12-month period ended 31 March 2016.
The Seattle-based e-commerce major also reported a doubling of its annual revenues to Rs2,275 crore for the year ended 31 March 2016 from Rs1,022 crore during the previous financial year.
Reports quoting figures from documents filed with the Registrar of Companies, also show a four-fold increase in its authorised share capital to Rs16,000 crore and an increase in its paid-up share capital to Rs9,629 crore.
Besides aggressive marketing and deep discounts, Amazon is also stepping up investment in India in its stepped up fight to dethrone local rival Flipkart in a determined fight to win in India, the last large open global market.
Amazon attributes its huge growth in losses to spending on infrastructure, new fulfillment centres and on technology. It also said it is spending on launching new products and services for its customers and sellers in the country.
Amazon launched its loyalty service Prime ahead of the festive season and launched its video streaming service in December - both of which are said to have drawn heavy investments.
All three large e-commerce players in India also incur huge losses due to discounting of products on their platforms, and this is expected to be one of the top sources of Amazon India's losses.
Under the Department of Industrial Policy and Promotion guidelines for foreign direct investment (FDI) in e-commerce marketplaces, players aren't supposed to regulate the price of products sold.
Amazon has so far committed $5 billion to India and this has reflected in the company's global balance sheet for the first time.
In the quarter ended September 2016, Amazon reported a $541-million dollar loss from its International businesses, largely due to the investments in India.
