Amazon Internet Services slips into red in FY20 while revenue jumps 54%; expenses up 60% – The Financial Express

Clipped from: https://www.financialexpress.com/industry/sme/amazon-internet-services-slips-into-red-in-fy20-while-revenue-jumps-54-expenses-also-shoots-up/2152111/

The profit for Amazon’s subsidiary, which undertakes the resale and marketing of Amazon Web Services’ (AWS) cloud services in India, for the previous FYs stood at Rs 71.1 crore in FY19, Rs 28.5 crore in FY18, Rs 176.2 crore in FY17, and Rs 3.7 crore in FY16.

Amazon Internet Services — Amazon’s subsidiary, which undertakes the resale and marketing of Amazon Web Services’ (AWS) cloud services in India, has reported a net loss of Rs 20 lakh for the financial year ended March 31, 2020. The company had posted profits in the previous FYs including Rs 71.1 crore in FY19, Rs 28.5 crore in FY18, Rs 176.2 crore in FY17, and Rs 3.7 crore in FY16. On the other hand, the revenues reported for FY20 stood at Rs 4,216 crore, up 54 per cent from Rs 2,740 crore in the preceding financial year even as expenses also increased 60.5 per cent to Rs 4,178 crore in FY20 from Rs 2,602 crore in FY19.

The regulatory filing sourced from business intelligence platform Tofler showed that the employee benefit expenses increased 49 per cent from Rs 321.2 crore to Rs 480 crore while finance costs saw a steep jump of whopping 9,000 per cent from Rs 40 lakh to Rs 36.5 crore. Depreciation and amortization expenses were also up 101 per cent from Rs 23.1 crore to Rs 46.6 crore during the said period. However, the majority share of expenses belonged to other expenses, which increased 60 per cent from Rs 2,257.7 crore to Rs 3,615 crore, out of which reseller fees constituted the majority component increasing 52 per cent from Rs 1946 crore to Rs 2,966 crore. Ad and sales promotion costs were Rs 43.5 crore while traveling and conveyance costs were Rs 68.6 crore for FY20.

Amazon had last week reported FY20 financials for its payment verticals Amazon Pay in India with a 64 per cent jump in revenues to Rs 1,370 crore from FY19 and 61 per cent increase in net losses to Rs 1,868 crore while expenses stood at Rs 3,238 crore. Amazon Pay competes with Paytm, Walmart’s PhonePe, Google Pay, MobiKwik.

Launched in 2013 in India, Amazon India currently has over 7 lakh sellers on its marketplace that had recently surpassed the company’s U.K. and Germany marketplaces to become the second-largest marketplace in terms of the number of sellers, according to the Marketplace Pulse research. Moreover, Amazon has been adding more sellers in India than in other markets where it is present except the US. During his India early this year, Jeff Bezos had shared plans to get over 10 million (1 crore) micro, small, and medium enterprise sellers online by 2025.

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