Amazon has reiterated that India will remain its biggest focus outside North America although the company’s hefty investments in the country dragged its international business to its worst quarterly loss.
Among other things, that commitment will translate into more investments by the world’s largest ecommerce company to bring its Echo speaker devices and Alexa intelligent voice assistant to India. This is part of Amazon’s push to engage with customers more intuitively.
We are very hopeful with the progress we have made with sellers and customers alike in India and we see great momentum and success there, so we continue to invest,” Amazon’s chief financial officer Brian Olsavsky said in a post-earnings call when asked to rank geographies and category expansion with respect to international margins.
Amazon has disclosed investment of Rs 2,120 crore in two major online commerce units in India — Amazon Seller Services and Amazon Wholesale — since the beginning of this year. Also, ET reported in June that Amazon was set to introduce its Alexa Voice Service and Echo speakers in India by the end of this year.
The year-over-year difference is primarily driven by investments… we continue to invest in fulfillment capacity and logistics services, digital video, our Echo and Alexa, Echo devices and Alexa platform (in) India, the buildup at the AWS infrastructure, as well as Prime Now and Amazon Fresh and Prime benefits, Olsavsky said in the call. Amazon India did not reply to specific queries from ET on its parent company’s results and focus on India.
Analysts believe that given Amazon’s neck-and-neck race with Flipkart in the Indian market, the company is likely to increase investments here. The global giant has committed $5 billion for its India operations.
Amazon has indicated in its guidance that the next few quarters will be similar (to the second quarter) or worse in terms of results, said Satish Meena, senior forecast analyst at Forrester Research. Since Amazon’s gap with Flipkart is very small, it is likely to be more aggressive till it becomes number 1, especially with Alibaba and SoftBank also throwing their weight behind Indian players. Arvind Singhal of retail consultancy firm Technopak said Amazon will focus on creating a convergence of services for customers in India apart from merchandise.
Amazon seems to be looking for long-term leadership in India and is looking to be a onestop place for customers for everything from ecommerce, grocery, as well as in the artificial intelligence space (for Echo and Alexa). The approach is similar to what (Reliance) Jio is doing in the Indian market with its phone, wallet and telecom service, Singhal said.
Singhal, however, said it was too early to determine the impact of Echo and Alexa coming to India. Meena said demand for the Echo and Alexa platform in India will depend on pricing and may not significantly bump up sales for Amazon India. Apart from India, the two analysts said, Amazon is also focusing aggressively on Southeast Asia and the Middle East. Read More..