It was in 2012 that Amazon entered the Indian market through the price comparison portal Junglee. A year later, he presented his market platform. Even when they suspended Junglee in 2017, Amazon has since operated six entities: Amazon Marketplace, Amazon Internet (AWS), Amazon Wholesale, Amazon Data, Amazon Pay, and Amazon Retail.
Over the years, these six entities have experienced rapid growth and accumulated $5.56 billion (Rs 42,260 crore) in revenue in the fiscal year ending March 2022 (FY22), marking a growth of 36% compared to FY21. The consolidated loss of these companies declined by 8% to $834 million (Rs 6,339 crore) in FY22.
To understand the growth of all these companies in FY22, fintrackr scrutinized their balance sheet in detail. Let’s take a look at the financial numbers for each of these entities below:
Amazon Marketplace exceeds Rs 21,000 Cr
Amazon Marketplace revenue jumped 32% to Rs 21,462 crore in FY22. Seller services remained the main revenue driver, constituting 87% of the platform’s total scale in during the last fiscal year.
Transportation and distribution costs are major expenses which amounted to Rs 6,751 crore in FY22. The company also spent Rs 3,426 crore and Rs 3,498 crore respectively on advertising and services legal and professional.
Despite surging, Amazon Marketplace managed to cut losses by 23% to Rs 3,649 crore in FY22.
Amazon Internet (AWS) revenue approaches Rs 9,000 Cr
Amazon Internet provides cloud-related services, including the sale of computing, storage, database, and professional and training services. Revenue from these services soared 66% to Rs 8,956 crore in FY22 from Rs 5,405 crore in FY21.
Reseller fees are the largest cost to the company, accounting for 74% of the overall expenses which amounted to Rs 6,620 crore in FY22.
Employee benefit costs rose by 47% to Rs 1,244 crore, pushing overall costs to Rs 8,904 crore in FY22. In the end, Amazon Internet recorded a loss of Rs 2 .3 crore in FY22 compared to a profit of Rs 18.5 crore in the previous financial year (FY21).
Amazon Wholesale losses zoom 3X
Amazon Wholesale’s operating revenue increased by 27% to Rs 4,592 crore. The company also earned an additional Rs 13.4 crore as other income in FY22.
On the expense side, the cost of obtaining products is the largest cost for Amazon wholesale, accounting for 94% of overall expenses which amounted to Rs 4,803 crore in FY22. With a 34% increase in costs, the company’s losses increased 3 times to Rs 480 crore in FY22 compared to the previous year.
Amazon Data profits increase by 2.5 times
Amazon Data, which provides hosting services to related entities, saw an almost 40% increase in revenue to Rs 3,540 crore in FY22. The company earmarked Rs 1,833 crore to as depreciation, which represents 58% of the total cost. It added another Rs 421 crore and Rs 409 crore as communication and energy/fuel costs respectively, which expanded its expenditure to Rs 3,122 crore in FY22.
As the scale increased, the company’s profit increased by 2.5 times to Rs 327 crore in FY22 from Rs 131 crore in the previous financial year (FY21) .
Amazon Pay India collection increased by 17%
Consumer payment company Amazon Pay’s revenue grew 17% to Rs 2,000 crore in FY22. Payment processing fees are the only source of operating revenue for the app payment method based on the Unified Payment Interface (UPI).
On the expense side, advertising and payment processing fees were the major cost centers for Amazon Pay India. These alone accounted for 87% of the overall cost, pushing total expenditure to Rs 3,793 crore in FY22.
With a 15% increase in expenses, the Bengaluru-based company’s losses increased by 14.8% to Rs 1,741 crore in FY22 from Rs 1,516 crore in FY22. exercise 21.
Amazon Retail remains stable, the loss increased by 22%
Retail segment product sales increased by only 8% to Rs 1,710 crore in FY22 from Rs 1,585 crore in FY21. The cost Procurement was the largest cost to Amazon Retail, accounting for approximately 60% of overall spend. This cost was recorded at Rs 1,479 crore in FY22, while it added another Rs 567 crore and Rs 127 crore as legal/professional fees and platform selling fees respectively .
Although the business has not grown much, its expenses have increased by 12%, which has increased its losses to Rs 800 crore in FY22.
Looking at these numbers, it’s clear that beyond the obvious like Amazon Data, whose profits have been grossly underestimated due to high depreciation charges, it’s Amazon Marketplace (Seller Services) that would be next. source of income. Amazon Internet is again a case of investment in a ditch by Amazon, as the company generates strong profits in other major markets like the United States.
With competition from Microsoft Azure, Google Cloud, even Jio and possibly Adani in the future, this is the company where strategies will be closely watched, as AWS has already done the hard work to establish a brand, a strong infrastructure and customer base.
Amazon Wholesale, Retail and Pay will continue to be in the red for the foreseeable future, although their impact will be less due to the relatively lower share of the Amazon pie in India. For Amazon, which is heading for $6 billion in FY23, and likely a much more ambitious number in FY2030, the losses are nothing to worry about, as the giant has made huge strides with each elements of his portfolio. It’s a strategy it has honed very well in its home market, the US, and we in India will see that patience and resilience play out for at least the next 3-5 years.