Amazon’s logistics business posts 75% jump in India losses; expenses also up 42%

Amazon India’s logistics vertical Amazon Transportation Services (ATS) has reported a 43 per cent jump in its FY20 revenues to Rs 2,964 crore from Rs 2,078 crore in FY19. However, losses also increased 75 per cent to Rs 48 crore from Rs 27.5 crore during the said period, according to the regulatory filing sourced from business intelligence platform Tofler. ATS’ expenses were also up 42.5 per cent to Rs 2,995 crore in FY20 from Rs 2,100 crore in FY19. The company said that it has continued to invest heavily in building infrastructure and logistics business to expand keeping in mind the future growth and that had led to expenses growing considerably.

“Company will keep on investing in further expansion and also technology. Management of the company is also confident on future growth,” it added in the filing. Among major expenses incurred were delivery service fee at Rs 2,001 crore, repairs and maintenance at Rs 120 crore, legal and professional fee of Rs 106 crore, employee benefit expenses of Rs 314 crore, etc.

According to a recent study by on-demand logistics network Shadowfax and consultancy firm RedSeer on the e-commerce sector’s quarterly performance on supply chain and logistics in Q2 FY21, Amazon was the top marketplace among the horizontal retailers such as Flipkart, Snapdeal, Paytm Mall, and Meesho. Amazon topped the customer experience and speed & cost efficiency indexes while Flipkart led the growth and scale index. India’s e-commerce logistics market is likely to grow from 2,552 million shipments in FY20 to 10,485 million shipments in FY25, registering over 33 per cent annual growth rate.

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Amazon had recently reported financials for its Amazon Internet Services, which undertakes the resale and marketing of Amazon Web Services’ (AWS) cloud services in India, and payment verticals Amazon Pay. Amazon Internet Services reported a net loss of Rs 20 lakh for the financial year ended March 31, 2020. While revenues stood at Rs 4,216 crore, up 54 per cent from Rs 2,740 crore in FY19. For the payment arm, the revenues jumped 64 per cent to Rs 1,370 crore from FY19. Its losses also increased 61 per cent to Rs 1,868 crore from the preceding FY.