Amazon India to touch $81 bn GMV by 2025 but will remain behind Flipkart, suggests report

By 2025, Amazon India’s sale will be one-fifth of its total international sales and its Gross Merchandise Value (GMV) will touch $81 billion.

As per a report by Bank of America Merrill Lynch, Amazon's India unit will also make $2.2 billion in operating profits by 2025.

However, with these figures, Amazon India will still remain behind Flipkart, which will continue to be on number one position in India.

The report said Amazon's GMV market share will improve to 37% by 2019 from 21% in 2015. It expects Snapdeal's market share to fall from 14% in 2015 to 9% by 2019.

"India revenue is small today, but the investment is financially relevant as the Amazon could be losing $0.5-$1bn a year. Longer-term, by 2025 estimate Amazon India could generate $81bn in GMV (~20% of total International GMV) and $2.2bn in operating profit," the report by analysts Justin Post, Sachin Salgaonkar and Akshay Bhatia, stated.

Amazon India is investing in India and Jeff Bezos raised the sum to $5 billion from $2 billion.

The main India unit, Amazon Seller Services, has received Rs 8,618 crore since beginning of 2015 and over Rs 9,600 crore since it was set up. In March Amazon also made its intention clear to keep pumping in more capital, as it filed to increase its authorised capital from Rs 8,500 crore to Rs 16,000 crore.

"India profitability will depend on Amazon's investment posture, which is somewhat unpredictable. However, longer term, assuming Amazon continues to operate a marketplace only model in India, it is possible that Amazon India could realize a margin profile similar to eBay's operating margin in mid-30's," said the report.

Recently, Amazon India raced past Flipkart in seller base and is launching various initiatives to woo shoppers and increase more merchants.
Meanwhile, Amazon India wants to have 27 FCs across states covering a total area of close to 2.5 million square feet and a storage capacity of 7.5 million cubic feet.