Amazon Seller Services, which runs the Amazon India marketplace, reported a 32% jump in overall revenue to Rs 21,633 crore on a standalone basis for the financial year 2021-2022 (FY22), from Rs 16,378 crore a year ago.
The ecommerce marketplace also managed to cut net losses by almost 23% to Rs 3,649 crore in FY22 from Rs 4,748 crore in FY21. Revenue from operations for the marketplace stood at Rs 21,462 crore in FY22 from Rs 16,200 crore in the year-ago period.
The marketplace unit of Amazon India, the main competitor of Walmart-owned Flipkart, generates revenue from multiple sources, including fees for offering its marketplace to sellers and services such as shipping, advertising and others.
Amazon Seller Services spent Rs 6,751.2 crore on delivering orders,
compared to Rs 6,332 crore in FY21. It earned Rs 4,171.4 crore from advertising services compared to Rs 2,554.2 crore a year ago.
Amazon Transportation, the local shipping services arm of the US ecommerce giant, reported total revenues of Rs 4,581 crore in FY22, a 12.6% jump from the year-ago period. Amazon Transportation had reported total revenues of Rs 4,068 crore in FY21.
Discover the stories of your interest
Net losses for the shipping services arm also grew by over 38% to Rs 95 crore in FY22 from Rs 68.7 crore a year ago.
Amazon’s payments and financial services distribution arm, Amazon Pay India, reported a 16% jump in revenue to Rs 2,052 crore in FY22. Total losses for ecommerce major’s fintech arm also grew to Rs 1,740.8 crore in FY22 from Rs 1,516 crore a year ago. This unit runs Amazon Pay wallet and operates its Unified Payments Interface (UPI) offerings besides other payment services.
In June 2021, Meta-owned messaging service WhatsApp roped in Manesh Mahatme, former director and board member of Amazon Pay India, as director of its payments unit WhatsApp Pay in India.
Amazon’s results come after a
report from research firm Bernstein said Amazon India’s business report card has been ‘decidedly mixed’ in spite of the US ecommerce major investing over $6.5 billion in the country over the past nine years.
The company has made headway with customers in metros and tier 1 cities, Bernsetein said in its report, but faces “immense competitive pressure” in new categories such as grocery from domestic players like Reliance (JioMart), and in new markets from startups like Meesho.
The biggest challenge for Amazon, however, has been regulatory headwinds, since many of India’s new ecommerce rules favour domestic companies, the report said.
The Bernstein report also said Amazon has struggled to grow its business significantly in high-margin categories such as fashion, and beauty and personal care, which are dominated by rivals Flipkart and Nykaa, respectively.
It also added that regulatory headwinds and an “unfavourable regulatory environment” compared to its domestic rivals continued to be a challenge to its growth.
India’s foreign direct investment (FDI) rules, which bar foreign etailers such as Amazon from owning inventory and holding stakes in sellers on their marketplace, have forced it to make changes and shut down Cloudtail, one of its biggest sellers in which it also held a stake. Cloudtail is no longer a seller on the platform after Amazon bought 100% stake this year in Cloudtail parent Prione Business Services and shut it down.
Amazon recently completed nine years in India and will now focus on social commerce and local stores to add the next 500 million users,
ET reported in June, quoting Manish Tiwary, country manager, India consumer business, Amazon India.
