Amazon arm cuts India losses

13 September 2022, Mumbai:

Amazon’s marketplace unit cut its losses while the other two businesses saw an increase in losses. Amazon India has three key units, the marketplace, logistics, and payments.

Revenues of Amazon Seller Services, which runs the Amazon India marketplace, jumped 32 percent. The e-commerce marketplace also managed to cut net losses by 23 percent.

The marketplace unit of Amazon India generates revenue from multiple sources, including fees for offering its marketplace to sellers and services such as shipping, advertising, and others. Revenues of Amazon Transportation, the local shipping services arm of the e-commerce giant, jumped 12 percent. Net losses for the shipping services arm also grew by over 38 percent.

Amazon India has made headway with customers in metros and Tier I cities but faces immense competitive pressure in new categories such as grocery from domestic players and from startups. The biggest challenge for Amazon, however, has been regulatory headwinds, since many of India’s new e-commerce rules favor domestic companies.

Amazon has struggled to grow its business significantly in high-margin categories such as fashion, beauty, and personal care.

Amazon has completed nine years in India and will now focus on social commerce and local stores to add the next 500 million users.

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