Amazon’s net loss widens to Rs 1,724 crore even when sales jump 6-times!

Amazon Inc’s net loss for its India business widened to Rs 1,724 crore in the year ended March 2015, taking the combined losses of the ‘Big 3’ online firms including Flipkart and Snapdeal to Rs 5,052 crore as they hunted for buyers by offering deep discounts.

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Amazon Seller Services registered a six-fold increase in sales to Rs 1,022 crore in 2014-15 from Rs 169 crore a year earlier. The company earns income from seller commissions, advertisement revenue and sales of its Kindle e-reader on its portal. A year ago, it had a net loss of Rs 321 crore.

While the three firms raced ahead to control majority of the market, profitability took a hit. This was due to expenses on employees, marketing and promotions.

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The two main entities controlled by Flipkart, India’s largest ecommerce firm, reported a loss of about Rs 2,000 crore in the year ended March compared with a loss of Rs 715 crore in the previous year.Snapdeal.com, reported a loss of Rs 1,328 crore for the year ended March.

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While the three firms raced ahead to control majority of the market, profitability took a hit. This was due to expenses on employees, marketing and promotions.

“At the end of Q3-2015, we saw an approximately 500% Y-O-Y growth in volume, and in Q4-2015 we sold more than we did in all of 2014. We are committed to investing aggressively with a long-term horizon and transforming the way India buys and sells,” the spokesperson added.

Amazon expects India to overtake Japan, Germany and the UK to become its largest overseas market, besides becoming the quickest to reach $10 billion in gross merchandise value. Amazon may invest about $5 billion in India, up from $2 billion pledged earlier by founder Jeff Bezos, ET reported in July.

India’s e-commerce sector is expected to grow to $103 billion by March 2020 from $26 billion. The number of Internet users in India has quadrupled to over 400 million now, of which about 300 million access the Internet at least once in a month and 40 million have engaged in online shopping.

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Prashant Tripathi

A crazy photography ,a developer,blogger and editing geek....loves to play with images and their colour contrasts. A web experimentalalist too.

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