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Amazon to continue investments in India, other international markets

Amazon.com Inc. is considering leasing 20 Boeing Co. 767 freighter jets to help gain more control over its delivery methods and costs. Photo: BloombergPremium
Amazon.com Inc. is considering leasing 20 Boeing Co. 767 freighter jets to help gain more control over its delivery methods and costs. Photo: Bloomberg

  • For India, Amazon has announced the expansion of its network with 10 new fulfillment centers, 5 new sortation centers, nearly 200 delivery stations, and over 100,000 seasonal jobs to help meet customer demand

BENGALURU: Global e-commerce major Amazon.com Inc. saw its revenue touch $96.1 billion in the September quarter, up 37% from a year ago, driven by robust sales. Net income rose to $6.3 billion from $2.1 billion in the year-ago quarter.

Amazon announced its results early on Friday.

Chief financial officer (CFO) Brian Olsavsky said the company will continue to invest in international markets, especially in India, as volumes grow.

“I would say generally we're still investing ahead of the US in a lot of dimensions internationally (in) things like Prime benefits, things like devices, things like international expansions […] we're committed to continuing that (level of investments) even after the pandemic and including the international segment of course is India where we've had a very strong Prime Day and Diwali is off to a good start and so anyway," Olsavsky said in an earnings call.

Amazon said that its India arm which kicked off its month-long ‘Great Indian Festival’ sale on 17 October saw its sellers and brand partners experience the biggest two days of sales in the festival’s history. Amazon India also hosted Prime Day on 6-7 August, during which twice as many customers became members compared to the previous year.

In the third quarter, international operations of Amazon registered a profit of $407 million. This comes on the back of ‘strong volume’ growth in countries in Europe and Japan, as well as with expansion of its products including Prime Benefits and Echo devices to new geographies, Amazon said.

“So we may be putting in a future volume onto this year's cost structure. So that is probably why you're starting to see that is why you're seeing profitability internationally," replied Olsavsky to analysts on the call.

Since 2013, Amazon Inc. has committed to invest around $6.5 billion in its Indian operations, as its India unit raised a total of 1,825 crores across businesses--e-commerce, Amazon.in and Amazon Pay--right before the festive season sales.

With expenses for the company standing at $2.5 billion in the third quarter of 2020, Amazon Inc. now expects its expenditure to climb to $4 billion in the fourth quarter, as the company witnesses costs like marketing expenses coming back.

During July-September, Amazon Inc. also opened up ‘network capacity’ in its transportation network to meet heightened consumer demand, hiring 2,50,000 permanent and full time resources.

“The largest portion of (P&L) costs relate to continue productivity headwinds in our facilities including process revisions to allow for social distancing and incremental cost to ramp up new facilities We expect to grow our fulfillment and logistics network square footage by approximately 50% this year which includes significant additions to our fulfillment centers as well as our transportation facilities," said Olsavsky.

Back in India, Amazon announced the expansion of its operations network with 10 new fulfillment centers, 5 new sortation centers, nearly 200 delivery stations, and over 100,000 seasonal jobs to help meet customer demand during the festival season.

During the earnings call, Amazon informed that internationally, the number of Prime members who stream Prime video grew by more than 80% year-over-year in the third quarter and international customers more than doubled the hours of content they watch on Prime video compared to last year.

This was on the back of more localised content with Amazon added in its international geographies, over the past months.

On Friday, American technology giant, Apple Inc. said that it set a new record for itself in India for the quarter ended September 2020. While not disclosing exact revenues for the country, the iPhone-manufacturer said that revenues from the Asia Pacific region (excluding China) grew by 10% year-over-year.

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