Amazon India marketplace net loss narrows as revenue rises over 30%

Amazon Seller Services' net loss narrowed in FY22 (2021-22) as the company, which runs Amazon India marketplace, reported a more than 30 percent rise in its operating revenue.

Amazon Seller Services reported a net loss of Rs 3,649 crore for FY22, down from Rs 4,748 crore in FY21 (2020-21), according to the company's regulatory filings sourced by business intelligence platform Tofler. Operating revenue rose 32 percent Rs 21,462 crore in FY22 from Rs 16,200 a year earlier, the filings showed.

During the year, the company managed to keep its operating costs in check, which helped it halve its EBITDA loss (earnings before interest, tax, depreciation and amortisiation) to Rs 1,286 crore. During the year, Amazon spent Rs 3,626 crore on advertising and marketing, a jump of nearly 26 percent from the previous year.

Amazon Seller Services had reported a sharp rise of almost 50 percent in its revenue, even in FY21, thanks to the stay-at-home Covid restrictions that led to buyers shopping online.

Meanwhile, Amazon Pay India, which runs an online payment system in India, also reported a net loss of Rs 1,741 crore for the fiscal year ended March 2022, data shared by Tofler showed. The company reported a revenue of Rs 2,052 crore for FY22, a rise of 16 percent from the previous year, the filings showed. Amazon Pay India's total expenses for the fiscal were reported as Rs 3,793 crore.

Another Amazon's India entity, Amazon Internet Services, an internet technology firm that runs Amazon Web Services in India, reported a 66 percent surge in its operating revenues to Rs 8,956 crore for FY22 from Rs 5,405 crore in FY21. The company, however, reported a net loss of Rs 2.3 crore for FY22 from a net profit of Rs 185 crore in FY21, regulatory filings sourced by Tofler showed.

Amazon Data Services, which provides IT and data hosting services to AWS India, too filed its FY22 results earlier this month with the MCA (Ministry of Corporate Affairs). The company reported a near 40 percent rise in its operating revenues for FY22. The company reported operating revenue of Rs 3,540 crore for FY22 from Rs 2,531 crore a year earlier. The company's net loss, however, widened to Rs 327 crore in FY22 from Rs 131 crore in FY21.

Meanwhile, Amazon Transporation Services,  a shipping services firm, reported a 13 percent rise in its revenue on year in FY22 to Rs 4,581 crore. The company reported a net loss of Rs 95 crore for FY21 from Rs 69 crore a year earlier.

Amazon's India entities financial numbers for FY22 come a week after brokerage firm Bernstein had filed a report saying how Amazon has never managed to turn profitable in India through the last eight years, even after making an investment of as much as $6.5 billion.

Amazon's India entities also face immense competitive pressure in the fast-growing categories like smartphones and apparel, a weaker value proposition in 'new' business areas like social commerce and quick commerce, limited traction in tier II and III cities, and an unfavourable regulatory environment for foreign retailers, the report by Bernstein said.

To be sure, Amazon.com Inc, parent of Amazon's India group entities has been one of the most profitable companies in the world and is ranked second on the Fortune's Global 500 list for 2022.