Festive season boost: Amazon India clocks 6% growth in new customers

US online retail giant Amazon has said its customer addition in India grew 6 per cent on the back of its festive season sales, which started early October.

Growth came on the back of yet another quarter of subdued rise in international sales, which include those in India, in the third quarter.

On a call with analysts on Thursday, Brian T Olsavsky, chief financial officer at Amazon.com, attributed part of the slowdown in the growth of the company’s international business to festive sales in India being pushed to the fourth quarter, unlike in the previous year.

The company reported a revenue of $15.5 billion from its international business during the quarter (July-September).

“On a year-over-year basis, you have to look at two things. We did the Souq acquisition last year in May. So the full pick-up on that year-over-year was in 2017 and now we’re lapping that. There’s also material change in the Diwali calendar in India. About half our Diwali sales last year were in Q3. This year they’ll be fully in Q4,” Olsavsky said.

While growth in its earnings in international markets slowed, Amazon continued to pare its losses, which came down to $385 million in Q3 from $494 million in Q2. Year-on-year, that represents nearly 2.5 times reduction in losses from international sales for Amazon, which had reported a loss of $936 million in Q3 2017.

This comes despite Amazon continuing to invest heavily in India, with the amount expected to top $2 billion in the current fiscal year.

The company has pumped in over ~76 billion in three tranches of ~26 billion, ~23 billion and ~27 billion in its India business in May, July and August, respectively.

Amazon has said it will keep investing in India because it sees a good uptick in sales. It’s also looking to overtake Flipkart.

“(Our) India (business) is doing really well. We’ve seen a great response from customers.

We’ve had 6 per cent growth in new customer addition during the period. Orders are coming in from 99 per cent of the pin codes in the countries,” added Olsavsky.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.