India tracking through earnings calls

Amazon's interest in the Indian market has fluctuated over the years, while Walmart seems more enthusiastic. However, it is Tim Cook's Apple that is most optimistic about its prospects

At a time when India is seen as a bright spot on the global business map, every detail matters. Therefore, it’s no surprise that earnings calls of top multinational companies are watched with utmost care to determine their level of interest in India. Against this backdrop, the recent January- March 2023 earnings call of Amazon disappointed those looking for a bright commentary on India. There was no mention of India at all in the Jeff Bezos-founded e-commerce major’s earnings call a few days ago. In this quarterly summit of company management, prominent analysts and investors, India scored a zero by way of mention.

While people watching the corporate scene didn’t think much about this omission, if you can call it that, it did make one reflect more on the significance of what is said and what is left unsaid in these quarterly events. Logically, the earnings calls are meant for investors and shareholders, and what they should look for in the company based on the current performance. So, do shareholders want to know about India at a time when the economy as well as businesses in the US and Europe need attention? The slowdown, impending recession, inflation, job losses—all the main issues facing nations— are global at this point. That may explain Amazon’s position, but it is certainly not the first time that the Nasdaq-listed Seattle heavyweight is giving India a miss.

Since launching its online marketplace in India in 2013 to compete directly with Flipkart, which was later acquired by Walmart in 2018, Amazon’s India play in earnings calls has gone up and down. It has pumped in around $7 billion into the India market over the last 10 years. A Sherwani-clad Bezos’ truck ride in Bengaluru in 2014, flashing the $2 billion cheque, remains the most memorable Amazon moment for many in India. There’s been nothing as dramatic from the company ever since. Separately, industry analysts suggest that Amazon India’s growth has slowed, though specific country-wise figures are not publicly available. Also, it seems to be behind Walmart-owned Flipkart in the tier 2 and 3 markets of India—which are considered a fast-growing e-commerce constituency.

These trends, captured mostly by analysts, may or may not reflect in the earnings calls. It’s the macro picture that typically dominates — it could be a war, pandemic or an economic crisis.

As for the India focus in earnings calls, here’s how Amazon did in the last three years or so. In the Q1 call, chief executive officer (CEO) Andy Jassy spoke about the “difficult decision” to eliminate about 27,000 corporate roles around the world. While not mentioning India, he spoke about overall challenges, like the lack of infrastructure in international business. In the previous quarter, Mr Jassy had said the company was “very enthusiastic’’ about the international business. India was part of the narrative. The July-September 2022 quarter earnings call of Amazon was silent on India. In Q2 of 2022, India figured with reference to losses. Before that, in three quarters back to back, spanning July 2021 to March 2022, India was missing. Prior to that, India found a place in the earnings calls for what the company was doing to help its employees and partners during Covid. It was in Q3 2020 that Amazon India found many mentions. On festive sales, it said: “We had a very strong Prime Day and Diwali is off to a good start’’.  This came after a quarter of Covid restrictions impacting the India business, with Amazon highlighting that “the biggest impact internationally” had been in India.

Amazon’s rival Walmart has been more generous in the number of times it has mentioned India in its earnings calls over the last couple of years. The number varies from 4 to 73 in a call. In the February 2020 earnings call, Walmart CEO Doug McMillon said the company was optimistic about the e-commerce opportunities in India given the size of the market and low penetration of e-commerce. He also hoped to work with the government here for pro-growth policies, while expressing disappointment in regulatory changes without a consultation process. In the Q4 2020 call, where India was mentioned 73 times, the CEO was enthused that the company was well-positioned to grow, as an emerging middle class in India spends money through mobile phones. “Like the US and Mexico, this is a market where we’ll step on the gas….’’ More recently, in the February 2023 earnings call, Walmart called the fundamentals of India strong and “strengthening all the time’’.   

While Walmart seems more gung-ho about the Indian market through its earnings calls, when compared to Amazon, it was Apple’s Tim Cook who set the bar high. “I’m very bullish on India,’’ Mr Cook said in the last earnings call. Soon after, Apple's first India store was launched. Coca-Cola CEO James Quincey added to the prevalent mood in the earnings call last month: “India’s economy remains resilient with a strong job market and robust consumption.”      

Given this exuberance about India, Amazon’s silence seemed a mismatch even though earnings calls can hardly be the only yardstick for gauging a company’s outlook. For Amazon, the India market had opened under the leadership of Mr Bezos, who did things differently from the current boss Jassy, who’s betting big on generative AI and Amazon Web Service. Mr Jassy’s recent letter to the shareholders captures his vision and how it sets him apart from Mr Bezos.  That may explain the company's priorities better than any earnings call.