Amazon India Cuts Losses by 28% in FY24, Gears Up for Quick Commerce Battle

Amazon Seller Services, the marketplace arm of Amazon India, has improved its financial performance in FY24 by cutting net losses by 28% and boosting operating revenue by 14% to ₹25,406 crore. This comes after the company’s revenue growth slowed to only 3% in FY23, showing a resurgence in FY24 following the pandemic-induced growth rates of 32% and 49% in FY22 and FY21, respectively.

The company’s total expenses increased slightly to ₹29,062 crores, with substantial costs directed toward advertising and sales promotion (₹3,586 crores), transportation and distribution (₹7,488 crores), and employee benefits (₹2,771 crores). Amazon India’s advertising services grew significantly, with revenue from marketplace-related services such as ads jumping 23% to ₹6,649 crore, accounting for a notable portion of its revenue growth. Sales and subscriptions, including Amazon Prime memberships, also contributed, making up over 56% of the company’s operating revenue.

Amazon India faces tough competition from Walmart-owned Flipkart, whose marketplace revenue rose by 21% in FY24 to ₹17,907 crore while cutting its losses by 41%. This rivalry has intensified, with both companies vying for market share in India’s rapidly evolving e-commerce space. Adding to the competitive landscape, quick commerce platforms such as Blinkit, Zepto, and Swiggy’s Instamart are making inroads by promising faster delivery times for popular categories like groceries, beauty products, and electronics.

Despite the competition from Walmart-Flipkart, Amazon seller services continue to capture a significant customer base. Its Great Indian Festival 2024 logged 1.4 billion visits, a record-breaking number with over 85% from non-metro areas, highlighting Amazon’s reach beyond urban centres.

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In its drive for profitability, Amazon India received a capital infusion of ₹830 crore from its parent company in FY24, with an additional ₹1,660 crore injected in April FY25. These funds aim to bolster its operations amid growing market pressures. Furthermore, Amazon’s strategic diversification into logistics and payments has also shown modest revenue growth, as seen in Amazon Transportation Services (ATS), which saw a 7.6% revenue increase and a 6.9% reduction in net losses.

The recent appointment of Samir Kumar as Amazon’s India country manager after the abrupt exit of the long-serving founding team member of Amazon India, Manish Tiwary, underscores the company’s renewed focus on capturing market share and achieving efficiency in the Indian market. Amazon India must maintain momentum and counter challenges from emerging e-commerce and quick commerce players, ensuring it remains formidable in India’s competitive retail landscape.