Amazon India incurs losses of Rs 3,572 crore in 2015-2016 financial year: Mint
Company officials attributed it to heavy spending on infrastructure and technology, and massive discounts that the site offered.
Online retailer Amazon India incurred losses of around Rs 3,572 crore in its last financial year 2015-2016, more than double the previous year’s. Company officials attributed the loss to heavy spending on infrastructure and technology and the massive discounts that the site offers, reported Mint.
However, the company’s revenue also doubled in the last financial year. The Seattle-based firm posted a revenue of Rs 2,275 crore, almost double from Rs 1,022 crore the previous year. Comparatively, Flipkart posted a revenue of Rs 1,952 crore for the same period while it incurred losses of Rs 2,306 crore.
Amazon has been aggressively spending on its promotions in India. Amazon.com Inc. increased the authorised share capital of its Indian unit by more than four times in 12 months, according to Mint. As of now, Amazon India’s authorised share capital stands at Rs 16,000 crore and the paid-up share capital is Rs 9,629 crore. While authorised share capital of a company is the maximum amount of share capital that the firm is authorised by its constitutional documents to allocate to shareholders, paid-up capital is the amount of money a company has received from shareholders in exchange of shares.
Earlier, Amazon had said it would invest around Rs 3,500 crore in the country, however, it has now committed to investing at least $5 billion (Rs 33,000 crore approximately) here. Amazon India Vice President Amit Agarwal had told Mint that the e-commerce company will now focus more on increasing the market share and improving its infrastructure. He had said Amazon wouldnot be bogged down by profitability fears in the near future.