Amazon India lost over Rs 3,000 crore in race to become number 1 and defeat Flipkart

Amazon India’s aggressive bid in the country to gain maximum market share did help the e-commerce site but in the race to become numero uno in the country, it lost more than Rs 3,000 crore.

Amazon’s Indian unit saw more than double losses at Rs 3,572 crore in the financial year ended March 2016.

In its race to beat Flipkart, Amazon India spent largely on infrastructure. The increase in losses from Rs 1,723 crore in the previous financial year indicates that Amazon Seller Services, which earns revenues from commissions and other services to sellers, lost $44 million or about Rs 300 crore per month during the last financial year.

Meanwhile, Flipkart’s sales increased 153% to Rs 1,952 crore during the same period. Both units earn revenues through commissions, advertisements and shipping fees that they charge sellers. But these numbers don't include revenues of Flipkart's fashion subsidiary Myntra.

Amazon recently invested Rs 2,010 crore in Amazon Seller Services, as its monthly losses increased to about Rs 1,000 crore in October in its battle for market leadership against Flipkart during Diwali.

“Amazon is in a full-fledged customer acquisition mode right now and they will continue their pace in 2017. While till now market share shift to Amazon has been from other players like Snapdeal, in 2017 it could be from Flipkart," Satish Mena, forecast analyst at Forrester Research, told ET.