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Cash-flush Flipkart forces Amazon's international losses to soar

Amazon saw international losses rise to $936 million in Q3 largely driven by its investments in India

Alnoor Peermohamed  |  Bengaluru 

Amazon India plans to set up experience centres in several Shoppers Stop outlets as part of the Rs 179-crore deal with  the retailer

US-based online giant on Friday reported a massive $936 million loss from its international business unit for the three months ended September, which it said was primarily driven by the company’s investments in “It is international expansion and primarily in where we're continuing to add benefits. And we launched there a year ago, if you remember, and we've had more members join in than in any other country in the first 12 months,” said Brian T. Olsavsky, Chief Financial Officer at Amazon, in a call with investors and analysts. Amazon’s losses from its international business have almost doubled in the past one year, from $541 million in Q3 last year to $936 million in the most recent quarter. The increase signifies Amazon’s growing investments in where it is trying to overthrow local incumbent as the top e-commerce marketplace. While the company continues to burn money to undercut the cost of products in order to get more users to shop with it, bringing new products and services has also drawn significant investments from the company. has in the past has also said the other major in includes real estate. “We had the first Day there (in India) this year, Music, Business is also expanding in So, a lot of positive momentum and going on in India, very pleased with that.

We also recently announced Echo and Alexa are available in India,” added Olsavsky. Amazon’s massive ramp up of in comes after rival raised $1.4 billion from Tencent, and followed by another $2.5 billion from Softbank earlier this year. Studying regulatory filings made by Amazon’s many Indian arms, it’s clear that the company has brought in investments in the tune of $1 billion into the country in 2017 alone. However, with its international losses for a single quarter rising to nearly $1 billion, Amazon’s in could be far more significant than anticipated earlier. While this could spell bad for Flipkart, industry watchers point out that Amazon’s burn through discounting has reduced, with the company potentially deploying more money on infra and new services. Flipkart, which claims it has a war chest of $4 billion to take on Amazon, is working on its own loyalty programme that will rival Prime, but says it will not merely offer free shipping like does. The company is also investing in categories such as grocery which will draw significant investments in logistics, apart from a plan to make strategic investments in several smaller Indian Internet firms. With the entry of as another large player (through Paytm Mall) in India’s online shopping space, analysts expect investments to soar as these global giants try to fight it out for supremacy. being the last large untapped open market in the world makes it extremely important, with Morgan Stanley expecting the market to grow to $200 billion by 2026.

First Published: Fri, October 27 2017. 11:05 IST
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