Amazon, the world's largest online retailer, said its December quarter (Q4) revenue took a hit as the Diwali festive season in India moved more into the third quarter. The other factor which affected the sales was the increase in Japanese consumption tax from eight per cent to 10 per cent.
"Those two items impacted the Q4 growth rate negatively by about 300 basis points," said Brian T Olsavsky, senior vice-president and chief financial officer of Amazon during an earnings call on Thursday."The Diwali timing, the Indian holiday, which has a very large swing factor on international revenues, it moved more into the third quarter, in 2019 versus 2018. So it was a help to Q3 and a penalty to Q4.”
For the fourth quarter, Amazon net sales increased 21 per cent to $87.4 billion, from $72.4 billion in Q4 2018.
During his India visit this month Amazon founder and chief executive Jeff Bezos pledged to invest $1 billion to help digitise traders and micro, small, and medium-sized businesses (MSMBs) across India, with the goal of bringing more than 10 million MSMBs online by 2025.
The Seattle-based firm said there are more than 550,000 sellers on Amazon India marketplace. More than 60,000 Indian manufacturers and brands are exporting their “Make in India” products to customers worldwide on Amazon. The company said it expects the new $1 billion investment to enable $10 billion in cumulative Indian exports by 2025.
“There are a lot of different facets (of) those types of investments. I won't go into too much for specifics, but a lot of work is being done there,” said David W Fildes, director of investor relations at Amazon, during the earnings call.
Since launching 'amazon.in' in 2013, Amazon has created more than 700,000 direct and indirect jobs in India. This month the firm announced plans to create an additional one million jobs in India by 2025, with continued investments in technology, infrastructure, and logistics.
Since 2014, Amazon has grown its employee base more than four times. Last year it inaugurated its new campus building in Hyderabad — Amazon’s first fully-owned campus outside the United States and the largest building globally in terms of employees and space.
“That team over there continues to do a great job locally of taking a lot of the tenets that we've had at Amazon around innovation building and really run with that over there,” said Fildes. “They have done a great job of coming up with some interesting and new services and features that I think are specific to that region.”
Amazon India on Thursday announced its partnership with the Eastern Railways to set up a pickup kiosk at Sealdah Railway Station in Kolkata. In 2019, as a pilot, Amazon India had partnered with the Indian Railways to launch pickup kiosks in four railway stations across Mumbai.
Fildes said the company would keep identifying different areas over in toolsets and features over in India that “we can bring back to other regions to help benefit other sellers and the other websites more broadly.”
This month Amazon India also announced it will have 10,000 electric vehicles in its delivery fleet by 2025. This investment is part of Amazon’s recent co-founding of The Climate Pledge, a commitment to meet the Paris Agreement 10 years early by achieving net-zero carbon emissions by 2040.
Amazon’s net sales for the full year 2019 increased 20 per cent to $280.5 billion, compared with $232.9 billion in 2018.
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