With Rs 2.8 Cr profit in FY17, Amazon relishes first-ever profit in India 

AmazonBusiness

Amazon Wholesale India, which has been aggressively investing into its B2B business in the Indian market, has reported a net profit of Rs 2.8 crore in the financial year 2016-2017. The company clocked a revenue of Rs 7,069.8 crore during the same fiscal.

To beef up its fight against Flipkart and Alibaba in the B2B segment, Amazon has been ramping up the business with huge fund infusions. The Seattle-based e-commerce major has invested around Rs 756 crore in Amazon Wholesale India in the past two years.

It invested Rs 115 crore in Amazon Wholesale India in September 2016 followed by a funding of Rs 160 crore in December of the same year. The wholesale arm again received Rs 341 crore from the parent company in May this year.

The latest tranche was received by Amazon Corporate Holdings Singapore and Amazon Inc Malaysia. Importantly, AmazonBusiness had recorded a whopping 2,700X leap in revenue during FY17. It posted a total turnover of Rs 7,047 crore from a mere Rs 2.63 in FY16.

For uninitiated, AmazonBusiness.in is the wholesale arm and invite-only platform. With having presence in Bengaluru and Mysuru, the platform aggregates inventory from about 10,000 sellers

It essentially deals with categories including fast-moving consumer goods (FMCG), food and beverages, office supplies, IT products, health and personal products and cleaning supplies. Besides selling to merchants, it also provides marketing and distribution channels for phone brands such as Coolpad and Honor that do not have offline channels.

Even in this segment, the two e-commerce behemoths— Flipkart and Amazon—in India are vying against each other to have the biggest pie.

In March this year, Flipkart’s parent firm pumped in around Rs 4,472 crore into its wholesale arm in the single-largest fund injection into any of its units in the past few years. Importantly, Myntra Jabong Private Limited also acts as a wholesale unit for fashion portals Myntra and Jabong, which are part of the Flipkart Group.

Meanwhile, Flipkart India (wholesale arm) had witnessed revenue rising 18 per cent to Rs 15,569.2 crore in FY17 from Rs 13,177.4 crore compared to the previous year. With 55 per cent reduction in losses, It bore a loss of Rs 244.7 crore in FY17 from Rs 544.5 crore corresponding year.

Besides wholesale, the two companies are neck and neck in online retail. After the acquisition of Flipkart-Walmart, the e-commerce game is going to take another turn when profitability will sink low and the price war once again emerges as the main factor.

The development was first reported by Businessline via paper.vc.

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