Appario Retail, the largest seller on Amazon India, has reported an 8% drop in revenue for FY23, totaling INR 14,604.2 crore. This reflects a slowdown on Amazon’s ecommerce marketplace in the country.
According to regulatory filings with the registrar of companies obtained from the business intelligence platform Tofler, Appario Retail recorded a slight increase in profit for FY23, reaching INR 84 crore compared to INR 82 crore in FY22.
In FY23, Amazon Seller Services, the operator of the India marketplace, experienced a modest 3.4% increase in revenue, reaching INR 22,198 crore. However, its losses expanded by 33%, totaling INR 4,854 crore. In contrast, during FY22, the entity had reported a 32% growth in operating revenue and successfully reduced its losses by 23%.
“While both Flipkart and Amazon India are still loss making, the nearly flat growth in topline is a clear indication of slowdown in growth,” a senior ecommerce industry executive said.
The operational income of Appario, a collaborative venture between Amazon and the Patni group, serves as a pivotal metric for assessing Amazon’s expansion in India. Appario specializes in selling products across various categories, including electronics, appliances, and other high-performing segments on the marketplace.
Despite sending an email to a spokesperson from Amazon India, there was no response regarding Appario’s financials and their potential implications on Amazon India’s business.
On November 24, it was reported that Amazon is exploring possibilities to permit Appario Retail to persist in selling on the platform. This marks a reversal of the previous decision to close it down, as the latest FDI rules prohibit marketplaces from holding a stake in seller entities.
Nevertheless, the sustained functioning of Appario may be essential for Amazon to return to a more rapid pace of growth.
Shutting down Cloudtail – one of the largest sellers on the platform and partially owned by Amazon – last year disrupted its operations. Amazon faced hurdles in transitioning from reliance on Cloudtail to other seller entities operated by different promoters, even though many of them were managed by former Amazon or Cloudtail executives.
Various sources have indicated that Amazon has engaged in talks with promoters of emerging seller entities to increase investments in the business and facilitate incentive-driven deals on the marketplace.
However, the majority of them have not yet reached the level of Appario, as Appario continues to hold the position of the largest seller on the platform.
“Appario is thus still continuing and there is no change in the near future,” one of the suppliers to the seller firm said.
Its financials highlight the subdued demand for e-commerce in India. Reports indicate that although the sale of premium items is contributing to value growth, there is a strain in demand for lower ASP (average selling price) products. Even during the recently concluded festive season sale, online demand was primarily driven by high-value items, but the overall volume was impacted.
“Growth was there in our top-end items, but the mass market items driving volume didn’t see equal demand. It is still higher than a normal day, but compared to previous festive sales, the growth was muted,” a senior executive at a leading electronics accessories brand said.
Meanwhile, a restructuring of top-level positions is in progress at the regional branch of the Seattle-based e-tailer, as reported on December 1.
