Amazon blames late Diwali in India for slow global sales
Amazon expects international sales to receive a boost in the December quarter, thanks to the late Diwali in India.
Bengaluru: Online retailer Amazon blamed a late Diwali after reporting a significant slowdown in growth from its international business, underscoring the importance of India to the e-commerce behemoth’s global ambitions.
Amazon has pledged to invest at least $5 billion in India and is expected to put in more in the country, where it is locked in a close market share battle with Walmart-backed Flipkart.
Amazon’s international sales grew at just 13% to $15.5 billion, compared to 29% a year ago. It, however, did manage to narrow losses from its international business. The Seattle-based e-commerce giant reported an operating loss of $385 million, compared to losses of $936 million a year ago. At a post-earnings conference call with investors, Amazon said it expects international sales to get a boost in the December quarter.
“There’s also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they’ll be fully in Q4. So those are a couple of factors that hit the international growth area in particular,” said Brian T. Olsavsky, chief financial officer.
In the first leg of the Diwali sale, both Flipkart and Amazon posted a robust performance, underscoring the revival of e-commerce in the country. Amazon India registered its best-ever performance in festive sales, which is usually dominated by Flipkart’s flagship Big Billion Days sale.
Amazon closed the gap with Flipkart during this year’s Great Indian Festival, driven by strong sales of smartphones. Flipkart continued its lead in terms of gross merchandise value, or the overall sale price of goods sold on a site, while Amazon exceeded its internal sales targets, Mint reported on 16 October.
Amazon was also bullish on India and indicated it was witnessing healthy growth in new customers in the country. “India, although Diwali moved into Q4, (is) going really well. We’ve seen great response from customers. We’ve had 60% growth in new customers during the period. Orders are coming in from 99% of pin codes in the country. So, great first wave of what we call the Amazon’s Great Indian Festival, which lead into Diwali,” said Olsavsky.
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