Amazon India’s wholesale arm posts loss of Rs 131 Cr in FY18Sameer Ranjan
The B2B arm of Amazon India saw its revenue from consumer electronics segment double in FY18 compared with last fiscal.
Amazon Wholesale India Private Ltd the wholesale B2B arm of Amazon India posted a net loss of Rs 131 crore, compared to the net profit of Rs 2.8 crore it generated during FY17, according to documents filed with the Registrar of Companies (RoC).
The increase in loss comes even as the company's revenue increased to Rs 12,245 crore in FY18, compared with Rs 7,069.8 crore in FY17. The revenue increase has also come at the cost an of increase in expenses by the company that grew to Rs 12,377 crore in FY18 from Rs 7,059 crore in FY17.
The revenue boost was primarily driven by the growth in the business of consumer electronics. The documents filed with RoC revealed that the company generated a revenue of Rs 12,134 crore in FY18, compared with Rs 6,982 crore in FY17 from consumer electronics segment.
While Amazon India marketplace is in a stiff competition with homegrown Flipkart marketplace, wholesale segments has given a new turf for both the titans to battle it out.
While Amazon India wholesale unit was in the red in FY18, Flipkart India Private Ltd, which runs a wholesale business, posted a 39 percent rise in revenue to Rs 21,658 crore for FY18, compared with Rs 15,569 crore in the previous fiscal. But the wholesale business unit’s net loss widened nine-fold to Rs 2,065 crore.
In the fiscal year 2017, the Flipkart’s wholesale unit had reported a net loss of Rs 244 crore. The company attributed the widening of the loss to a rise in employee benefit expenses and finance costs.
The wholesale B2B business segment became more attractive for e-commerce operators following regulatory changes by the government 2016 that restricted sales from a single vendor to 25 percent of a digital marketplace's gross sales. Not to miss the wholesale party, even Paytm joined the bandwagon and registered “Paytm Wholesale Commerce” this year with a share capital of Rs 20 crore. The shares were subscribed by Paytm E-Commerce Private Ltd, the entity which runs Paytm Mall.