Amazon Seller Services, the India marketplace arm of US online retail giant Amazon, recorded nearly $1 billion in losses for the year that ended March 2018 even as it saw significant revenue growth in the same period.
The company, which is the largest unit of Amazon India, posted a 57.5 per cent growth in revenue to Rs 49.28 billion in FY18, according to documents filed with the Registrar of Companies, which was sourced from business intelligence platform Paper.vc.
Losses in the same period grew by 30 per cent to Rs 62.87 billion, up from Rs 48.3 billion in the previous financial year. The rupee value on March 31, 2018, was around 65.07 per dollar, bringing the loss figure close to $1 billion.
In comparison, Flipkart India, the marketplace unit of the country's largest e-commerce marketplace, posted revenues of Rs 216.5 billion in FY18, a growth of 30 per cent when compared to the previous year. The unit also posted a 750 per cent growth in losses to Rs 20.6 billion.
Amazon Seller Services is heavy on losses but the company splits revenues more evenly among its other units. Flipkart, on the other hand, shows the bulk of its revenues from Flipkart India Pvt Ltd but reports big losses from multiple units.
In FY19, analysts and industry watchers expect both Amazon and Flipkart to post record losses that could touch $2 billion a piece. Amazon has already invested close to $1 billion in India in the first six months of the financial year and the pace of money flowing in should keep up.
Walmart, which picked up 77 per cent stake in Flipkart for $16 billion earlier this year, is now driving the competition with Amazon even further. The latter has responded by investing heavily in India's offline retail market as well, picking up 49 per cent stake in supermarket chain More for close to Rs 21 billion.
Amazon also invested Rs 1.8 billion in Shoppers Stop to pick up five per cent stake in the company last year.