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Thursday, May 28, 2020

Amazon says India business worst hit among foreign ops

Losses for Amazon’s international operations soared to $398 million in Q12020 from $90 million in the year-ago period with operating expenses shooting up to $19.50 billion.

Written by Asmita Dey | New Delhi | Updated: May 2, 2020 7:46:33 am
Amazon, Amazon business, India business worst hit, coronavirus impact on business, Amazon news, Indian express Shares of Amazon, the world’s largest online retailer, fell 5 per cent in after-hours trade. (Reuters/file)

Amazon has said its India business has been the worst hit among its international operations. Talking to investors on the Q12020 earnings call, chief financial officer Brian Olsavsky said, “The biggest impact internationally has been in India.”

He said the constraints of operating during the lockdown period, during which e-commerce players have been permitted to sell only essential items, had meant cutting back on merchandise.” We will expand when the Indian government announces that we are allowed to resume operations. So we are in bit of a holding pattern except for grocery in India,” Olsavsky said.

Losses for Amazon’s international operations soared to $398 million in Q12020 from $90 million in the year-ago period with operating expenses shooting up to $19.50 billion.

The global e-retailer’s net income for the quarter declined to $2.5 billion from $3.6 billion in Q1 2019.

Amazon said it could incur as much as $4 billion on COVID-19 related expenses. “Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe,” Jeff Bezos, founder and CEO, said.

Last month, the Ministry of Home Affairs (MHA) said the sale of non-essentials by e-commerce companies would be permitted only to reverse the decision a day before the rules were to kick in. Small businesses led by The Confederation of All India Traders (CAIT) had strongly opposed resumption of sale of non-essentials by online firms. A March report by Forrester Research said e-tailers are expected to take a hit of at least $1 billion in gross sales due to the lockdown that limits shipments to essential items. The report had captured the impact of the initial 21-day lockdown period. (FE)

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