Amazon Seller Services Pvt. Ltd., the marketplace arm of U.S retail giant Amazon.com Inc, that assists sellers to sell their products online in India and globally, has suffered an increase in net loss by 30% in the financial year 2017-2018 compared to the previous year.
The net loss deepened to ₹6,287 crore for the FY 2017-2018 from ₹4,831 crore compared to last year, according to the regulatory documents filed by Amazon, which were sourced from business intelligence platform Paper.vc. However, the company’s total revenue grew by 54% to ₹5,018 crore from ₹3,257 crore.
The firm attributed the losses to the investments in establishing infrastructure, opening new fulfilment centres and technology advancement “due to which the company’s loss increased to ₹6,287 crore,” said Amazon in the regulatory documents.
₹5.5 crore remuneration
The total expenditure by the firm was ₹11,305 crore compared to ₹8,087 crore last year. The firm said that it also continues to invest in launching new products and services for its customers and sellers. “The company is confident [in] its future growth,” according to the documents.
The documents also revealed that the combined remuneration that was given to the two whole time directors at Amazon Seller Services — Kandula Raghava Rao and Noorulamin Mohd Saheb Patel — was around ₹5.5 crore.
The total income tax and service tax dues that the company has deposited ‘under protest’ is ₹96.3 crore, according to the documents.
Diwali impact
Last month on a call with analysts, Brian T. Olsavsky, the chief financial officer at Amazon.com blamed a portion of the slowdown in the growth of the international business due to the festive sales in India being moved to the fourth quarter.
“There's also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they'll be fully in Q4. So those are a couple factors that hit the international growth area,” said Mr. Olsavsky.
But he said that although Diwali moved into Q4, Amazon witnessed 60% growth in new customers during the period. “Orders are coming in from 99% of the pin codes in the country. So, a great first wave of... what we call the Amazon's Great Indian Festival, which leads into Diwali,” he said.
This week it was also revealed, the wholesale entity of Amazon’s rival Flipkart has suffered a net loss of almost nine-fold in the financial year 2017-2018 compared to the previous year. Flipkart India Private Limited reported a net loss of ₹2064 crore as compared to ₹245 crore in the previous financial year. However, Flipkart India’s revenues rose by 39.11% to ₹21,658 crore from ₹15,569 crore.
