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Amazon Wholesale India revenue dips 8% to Rs 11,232 crore in FY19

While the etailer's B2B arm saw revenue dip courtesy the revised FDI norms in ecommerce, Amazon Seller Services and Amazon Pay India both managed to significantly drive up revenue

twitter-logoBusinessToday.In | October 29, 2019 | Updated 16:54 IST
Amazon Wholesale India revenue dips 8% to Rs 11,232 crore in FY19
Amazon Pay India also reported a nearly 250 per cent spike in losses to Rs 1,160.8 crore in FY19 compared to the previous fiscal

The last fiscal proved a mixed bag for Amazon in India. While Amazon Seller Services, the online marketplace unit of the e-commerce giant, managed to drive up revenue and narrow its losses, its B2B arm went the opposite way. As per regulatory filings, Amazon Wholesale India's revenues for FY19 stood at Rs 11,232 crore, an 8 per cent fall year-on-year, The Economic Times reported.

"Total revenue of the company in Financial Year 2018-19 fell to Rs 112,316 million [Rs 11,231.6 crore] in comparison of last year revenue of Rs 122,242 million [Rs 12,224.2 crore]. Company is in the process [of] expanding its business and management is confident of its future growth," the entity stated in a filing with the Registrar of Companies (RoC). However, the B2B arm's losses widened to about Rs 141 crore during the same fiscal from Rs 131.4 crore in 2017-18.

This could be courtesy the revised FDI norms in ecommerce, which came into effect in February. The new rules bar online marketplaces that have foreign investments from offering products of sellers in which they hold a stake and ban exclusive marketing arrangements. Another clause states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor's purchases are from the marketplace entity, including the latter's wholesale unit. Products from sellers like Cloudtail and Appario -- that had equity investment from Amazon -- were consequently taken off from's platform. Significantly, Amazon Wholesale generates all of its revenue from sale of products to resellers.

Amazon Seller Services meanwhile successfully narrowed its loss to Rs 5,685 crore for 2018-19 -- down from Rs 6,287 crore in the previous year -- despite its expenses rising 15.6 per cent to Rs 10,802 crore. The entity also saw revenue shoot up 54 per cent to Rs 7,593 crore in the period under review -- marketplace services fared particularly well, with revenue increasing nearly fourfold to Rs 951 crore.

The higher expenses are reportedly attributed to increased spending on delivery, up 23.8 per cent to Rs 3,663 crore. The second-largest expense in FY19 was advertising and sales promotions, and the unit spent Rs 2,331 crore on it, while legal fees shot up 26.5 per cent to Rs 1,448 crore.

"The company also recognises revenue from providing space for advertisements on its website, which are recognised based on the number of clicks or impressions, and reported as other marketplace-related services," the RoC filing added. Amazon Seller Services' earnings from advertising doubled to Rs 905 crore in FY19 from Rs 453 crore in FY18.

Amazon Pay India also reported a nearly 250 per cent spike in losses to Rs 1,160.8 crore in FY19 compared to the previous fiscal. However, the payments arm, which competes with the likes of Paytm, Flipkart's PhonePe and Google Pay, saw revenues more than double to Rs 834.5 crore. Coupled with its other entities in India, Amazon's total losses in India stood at over Rs 7,000 crore last fiscal.

With PTI inputs

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