Following a reduction in its loss during the fiscal year 2022, Amazon Seller Services, the marketplace segment of Amazon India, experienced a 33% increase in its standalone net loss, reaching INR 4,854.1 crore in the financial year 2022-23 (FY23), compared to INR 3,649.2 crore in the preceding year.
Conversely, the organization’s operating revenue saw a modest 3.4% rise to INR 22,198 crore in the current fiscal year from INR 21,462 crore in FY22.
During the fiscal year 2022, Amazon Seller Services witnessed a 23% year-on-year (YoY) reduction in loss, alongside a 32% increase in operating revenue compared to FY21.
The majority of the company’s revenue is generated through the provision of marketplace services. It provides programs that empower sellers to market their products via its internal platform and fulfill orders through it. Additionally, the company derives revenue from subscription services, encompassing fees related to Amazon Prime memberships and access to content such as digital video, digital music, and e-books.
Amazon Seller Services also generates income from various other marketplace-related services, including the sale of advertising services and royalties, which involve revenue earned through the licensing of digital content.
Taking into account the previously mentioned revenue streams along with other non-operating income, the total revenue for the entity amounted to INR 22,429.5 crore in the fiscal year 2022-23 (FY23).
E-commerce giant Amazon’s marketplace business in India competes with Walmart-backed Flipkart, marketplaces owned by Tata and Reliance, as well as new-age platforms like Meesho and Nykaa, among others.
In its Q2 2022 performance disclosure earlier this year, Amazon, the US-based e-commerce giant, indicated that its operations in emerging countries such as India, Brazil, and the Middle East would require some time to achieve profitability, but these markets were progressing along favorable trajectories.
However, the company’s statements, subsequent to the release of financials for the quarter ended March 31, 2023, did not make any reference to the India business, prompting considerable scrutiny.
Total expenses for Amazon Seller Services surged by 7.9% to INR 27,283.6 crore in the fiscal year 2022-23 (FY23), compared to INR 25,282.6 crore in the preceding fiscal year.
Employee benefit expenses for the entity constituted 10.2% of the total expenses in the year under review, rising to INR 2,794.7 crore from INR 2,192.7 crore in FY22.
In this regard, the company allocated INR 1,928.6 crore for salaries, bonuses, and wages. The employee share-based payment (equity settled) for Amazon Seller Services rose to INR 690.5 crore in FY23, up from INR 559.4 crore in the preceding year.
Delivery charges constituted the largest portion of Amazon Seller Services’ total expenses in FY23, surpassing 25%.
In the reported period, the company allocated INR 6,863.1 crore to delivery charges, compared to the expenditure of INR 6,751.2 crore in FY22.
The company successfully reduced its advertising promotional expenses to INR 3,209 crore in FY23, down from INR 3,426.4 crore in the previous fiscal.
Legal professional charges for Amazon Seller Services increased by almost 3% year-on-year to INR 3,598.8 crore.
The company’s miscellaneous expenses, covering payment processor fees, reimbursement for damages of fulfilled inventories, exchange differences, allowances for doubtful debts, and other items, experienced a growth of over 9% year-on-year, reaching INR 4,875.8 crore in FY23.
