Amazon continues to make losses globally; 4-fold rise in Q4 losses

Amazon is continuing with its loss making streak globally as it continues to spend aggressively in its Indian unit. The company reported $487 million losses in Q4, a four-fold rise from $108 million during the same quarter last year, while the net sales increased by 18% q-o-q to $14 billion in Q4. Amazon also reported $541 million losses in Q3 due to investments in India. Aggressive promotions and spends on developing exclusive content for its Prime service were other reasons that saw Amazon’s revenue fall short of expectations. Although the company’s international ecommerce unit is under stress, it’s other two units i.e. retail business in North America and cloud business under Amazon Web Services continue to post healthy financials.

Amazon’s India unit received ~INR7,000 crore investment from its US parent during 2016, and has been involved in a neck to neck competition with domestic rival Flipkart for market dominance in the domestic online business. Its average losses per month are estimated to be ~INR600 crore ($90 million). The firm also commented that it will be spending a considerable amount of money developing exclusive content for India and announced the start of production of new Indian Amazon Original Series featuring top Indian talent and filmmakers, which will be available exclusively to Prime members in India.