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Amazon Q2 net profit down 77%; remains committed to India

Amazon Q2 net profit down 77%; remains committed to India
Smallbusiness2 min read
E-tailing giant Amazon's net profits tanked 77 per cent to USD 197 million (Rs 1,264 crore) in the June quarter hurt by wider losses in international operations, but said it remains committed to investing in India.

Amazon's operating losses in its international business widened to USD 724 million (Rs 4,646 crore) in June 2017 quarter against a loss of USD 135 million in the year-ago period.

Its revenues, on the other hand, jumped close to 25 per cent to USD 37.5 billion. Operating income of Amazon's North America business fell 38 per cent, while that from Amazon Web Services (AWS) rose 27 per cent.

Despite widening losses, Amazon remains committed to making further investments in India.

"...we continue to invest in India. We are very hopeful with the progress we have made with sellers and customers alike in India and we see great momentum and success there, so we continue to invest and we have some of our best people in that business," Amazon Chief Financial Officer Brian T Olsavsky said in an investor call.

Explaining the company's strategy, he said: "... we continue to invest in, as I said, fulfilment capacity and logistics services, digital video... India, the buildup at the AWS infrastructure, all the things I mentioned not to mention Prime Now and Amazon Fresh and Prime benefits."

The Seattle-based company, which is locked in an intense battle with Flipkart in India, has been aggressively pumping in money across its units here, including e-commerce and payments.

Since January this year, it has pumped in USD 600 million (Rs 3,800 crore). It had committed investments worth USD 5 billion to the Indian market last year.

Amazon India, which has recently completed four years of operations, has been directing its investments towards building warehouses, strengthening logistics and increasing product assortment.

Besides, money is also being invested in marketing and promotions as the company looks to bring more consumers into shopping online on its platform.

In April, Flipkart had raised USD 1.4 billion in funding from Tencent, eBay and Microsoft. It is also believed to be in discussions to buy smaller rival, Snapdeal that is expected to further intensify the battle.

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