Amazon Optimistic About A Stable E-Commerce Policy That Will Let It Invest More In India
Amazon, which is almost done pumping in its $5 billion investment in India, needs firepower to tackle Walmart-Flipkart here.
Amazon.com Inc. remains optimistic about a stable e-commerce policy in India that will allow it to invest more even as the world’s largest online retailer faces regulatory challenges in its largest market outside the U.S.
Amazon’s international sales, including in India, rose 12 percent on a yearly basis to $16.3 billion in the quarter ended June, according to its filings with the U.S. regulator. But its net loss widened to $601 million from $494 million loss a year earlier.
Still, the Seattle-based e-commerce giant, which missed its overall earnings target, is betting on the international market. That comes when it faces headwinds in India. Prime Minister Narendra Modi’s administration barred e-commerce marketplaces owned by overseas investors and their group companies from owning vendors, controlling the inventory, and offering deep discounts that amount to predatory pricing.
India also wants technology behemoths like Google and Amazon to store data locally.
“Our engagement with the Indian government makes us optimistic about partnering and collaborating to seek a stable, predicable policy that allows us to continue investing in our technology and infrastructure,” Brian Olsavsky, chief financial officer at Amazon.com, said at the second-quarter earnings conference. “And it also helps us to create jobs and scale local businesses.”
Amazon is almost done investing its committed $5 billion in India, and would need more firepower after Walmart Inc. bought its biggest rival Flipkart. The two compete with local rivals for a larger share of the $670-billion retail pie.
“We’ve invested a lot in our global selling program, which helps Indian sellers not only reach customers in India, but also in other geographies around the world,” Olsavsky said. The firm is now gearing up for the Diwali sale this year, he said
Amazon Prime users doubled in the last 18 months, he said, without giving a number. Redseer Management Consulting, in a recent report, had said that Amazon has 10 million such users in the country.
The company also introduced Amazon Flex in India last quarter. The programme, it said, will help local partners deliver packages and create related jobs in the country.