Amazon’s India business drags down the profits for global arm

Amazon, the world’s largest ecommerce player, reported its Q2 earnings with a steep decline in net profit owing to cash burn and high investment in the Indian vertical. The company reported $197 million in net profit during 2Q17, a significant decline from the $857 million value reported last year. However, India business has retained the tag of its growth engine. The company again indicated that India will be its biggest focus outside North America and talked of investments in Echo devices and the Alexa platform for India. Overall for the first six months of the year, the losses from the international business were $1.206 billion as compared to $255 million in 2016 during the same period.

Brian Olsavsky, Amazon’s Chief Financial Officer, said that “We continue to invest in India. We’re very hopeful with the progress we’ve made with sellers and customers alike in India and we see great momentum and success there, so we continue to invest and we have some of our best people in that business”. He further added that “The year-over-year difference is primarily driven by investments, what we were within the guidance range and we continue to invest in, as I said, fulfillment capacity and logistics services, digital video, our Echo and Alexa, Echo devices and Alexa platform India, the buildup at the AWS infrastructure, as well as Prime Now and Amazon Fresh and Prime benefits”.