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Amazon's global business posts $398 million loss on coronvirus lockdown in India

Amazon said that it incurred over $600 million in COVID-19 related costs in first quarter, and expects these costs to grow to $4 billion or more the coming quarter

Rukmini Rao | May 1, 2020 | Updated 22:52 IST
Amazon's global business posts $398 million loss on coronvirus lockdown in India

Amazon said that India's lockdown due to coronavirus pandemic has been the biggest impact to the company's international business segment. In the quarterly results call Amazon Brian CFO Olsavsky said, "We're now only fulfilling our essential goods such as grocery. So that's cut back a lot on our offering, and we will further expand when the Indian government announces that were allowed to resume operations." He further said that the company was in a 'bit of a holding pattern' except for grocery fulfillment, the only operations that the company is currently carrying out due to government restrictions.

Amazon's operating losses for international business segment galloped to $398 million dollars in Q1 2020 compared to $90 million in Q1 of 2019. The company said that it incurred over $600 million in COVID-19 related costs in first quarter, and expects these costs to grow to $4 billion or more the coming quarter. Globally across its operations , the headwinds for the company include costs in procuring personal protective equipment for employees, enhanced cleaning of the facilities, and also productivity could take a dip in their facilities where social distancing will have to be maintained even as they begin ramping up number of employees.

ALSO READ:Coronavirus update: Amazon profit falls as pandemic-related costs rise

Amit Agarwal, Amazon's India head, posted on Twitter, "E-commerce offers the safest way to ensure social distancing, saving lives and livelihoods. We urge the government to allow us to deliver all products (not just essentials) that citizens need over a prolonged period so that they can stay safe while simultaneously jump-starting MSME."

Amazon India recently launched 'Local Shops on Amazon' aimed at bringing e-commerce to local shopkeepers and retailers of all sizes to leverage Amazon's platform to sell online and can also choose to expand their serviceable areas using Amazon's fulfilment services. Gopal Pillai, VP, Seller Services - Amazon India, said "We focused all our efforts to only serve products that are essential to our customers during this time. It was heartening to see hundreds of retailers from the Local Shops program play an important role to help people across India practice social distancing while addressing their needs for essential products."

ALSO READ:Amazon sees heavy earnings hit, forecasts $4 billion in COVID-19-related costs

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