Amazon continued to gush about its India operations and investments in the country for the quarter ended March 31, 2017 (Q1 2017). CEO Jeff Bezos said that Amazon.in is the fastest growing marketplace and that it was still “Day 1 for e-commerce in India, adding that the company “will keep investing in technology and infrastructure while working hard to invent on behalf of our customers and small and medium businesses.”
Amazon added it has increased the fulfilment capacity for sellers by 26% this year; around mentioned that 80% of the sellers in India used its fulfilment services, as of September last year. Amazon now has 27 fulfilment centres operational across 10 states in India with a total storage capacity of over 7.5 million cubic feet.
Bezos added that the company has increased Prime selections by 75% since launching it nine months ago in India. Amazon has also green-lit 18 Indian original TV shows for Primes Video. Here’s a look at all the content tie-ups Prime Video has done so far.
Other notes from its results
International operations investments: Note that Amazon’s international segment reported a loss of $481 million compared to $121 million due to increasing investments in foreign markets particularly in India. In December, the company made a fresh investment of Rs 2010 crore into its India unit taking the overall investment in India to Rs 7,000 crore in the financial year.
Other notable global investments include:
– Launching Amazon Prime in Mexico with over 20 million eligible products. Prime members receive free one-day shipping in several of Mexico’s largest cities, free two-day shipping in the rest of the country, as well as access to Prime Video.
– AmazonFresh, its grocery delivery service, is now available in Tokyo, joining London as well as 21 metro areas in the US. Note that Amazon wants to make further inroads into the food retailing in India and has filed an application with the Department of Industrial Policy and Promotion (DIPP) which will allow it to stock and sell locally produced items online.
Robotics and sort centers: Amazon’s CFO Biran Olsavsky also detailed how the company brings efficiencies through robotics while answering an analyst question “We just launched am Amazon Robotics fulfillment center in the Tokyo area recently and I toured that last month, and it’s just amazing to see the strides that Amazon Robotics has taken and the efficiency we’re getting in our warehouse as a result,” he said. “It’s a collaboration and the movement between warehouses and sort centers and then to the end customer. The ability to have control through our sort centers has allowed us over the last few years to extend our cutoff times from 3:00 pm in most cases till midnight, ” Olsavsky added.
Amazon had disclosed some numbers regarding its robotics division in 2016 and said that the company has 30,000 robots deployed which handles warehousing and packaging. Amazon acquired Kiva Systems in 2012 for $775 million to kick-start its robotics operations.
Advertising: Answering an analyst question on seeing more Amazon ads, Olsavsky said that was pretty early in the days with advertising. “Our goal is to be helpful to consumers and enhance their shopping or their viewing experience with targeted recommendations, and we think a lot of the information we have and preferences of customers and recommendations help us do that for customers,” Olsavsky said. Advertising revenue is reported in the other revenue segment. The segment saw a decelerated growth from 99% in Q4 to 58% in Q1. But Olsavsky said that this was due to co-branded credit card agreements which fluctuate quarter-to-quarter based on contract terms. In 2016, Amazon’s ad business generated around $1.4 billion, as indicated by this
Advertising revenue is reported in the other revenue segment. The segment saw a decelerated growth from 99% in Q4 to 58% in Q1. But Olsavsky said that this was due to co-branded credit card agreements which fluctuate quarter-to-quarter based on contract terms. In 2016, Amazon’s ad business generated around $1.4 billion, as indicated by this Business Insider report.
Air logistics: Olsavsky added that the company now has 18 planes servicing its operations and has announced rights to lease up to 40 more planes.
– Net sales increased 23% to $35.7 billion in the first quarter, compared with $29.1 billion in first quarter 2016.
– Net profit was $724 million in the first quarter compared with net income of $513 million in first quarter 2016. An increase of 41% year-on-year.