Amazon India marketplace revenue crosses Rs 21K Cr in FY22, losses shrink 23%

Amazon and Flipkart have always been neck and neck. But Amazon’s FY22 numbers position it first on the finish line for now: the operating revenue of Amazon Seller Services in India crossed Rs 21,000 crore mark in the fiscal year ending March 2022.

Amazon India’s collection from its marketplace business increased 32.5% to Rs 21,462 crore in FY22, according to the company’s annual financial statements with the Registrar of Companies (RoC). Rendering marketplace services was the main source of revenue constituting 87% of the total collection. The scale of this vertical grew over 35% to Rs 18,703 crore in FY22 from Rs 13,817 crore in FY21. 

Marketing support services turned out to be the second largest revenue driver which soared 46% to Rs 2,606 crore in FY22 from Rs 1,786 crore in FY21. The company added another Rs 153 crore as royalty income.

Volume-wise, Amazon’s marketplace business for FY22 was over 2X bigger than that of Flipkart’s in FY21. Flipkart Internet which runs the marketplace business for the Bengaluru-based firm clocked a revenue of Rs 7,840 crore in FY21. Flipkart marketplace business is yet to disclose financial numbers for FY22.

On the expense side, transportation distribution expenses (read logistics) emerged as the largest cost center for Amazon Seller. This cost alone formed 26.7% of the overall cost which increased 6.6% to Rs 6,751 crore in FY22.

Legal and professional fees along with advertising/promotional expenses were the other prime costs for the company which increased 42.5% and 25.6% to Rs 3,498 crore and Rs 3,426 crore respectively in FY22.

Employee benefit expenses also grew by 20.5% to Rs 2,193 crore in FY22 from Rs 1,820 crore in FY21. As the scale increased, payment processor fees also increased 19% to Rs 1,928 crore in FY22.

The company added another Rs 1,953 crore and Rs 997 crore in FY22 as reimbursement for damages of fulfilled inventories and telephone postage respectively. These costs pushed the overall expenditure by 19.7% to Rs 25,283 crore in FY22 from Rs 21,127 crore in FY21.

With a 32.5% surge in scale, losses of the company narrowed by 23% to Rs 3,649 crore in FY22, and cash outflows from operating activities also contracted 60.7% to Rs 1,020 crore in FY22. On a unit level, the company spent Rs 1.18 to earn a single unit of operating revenue in FY22.

Amazon marketplace business has demonstrated strong growth in FY22 with controlled expenses. However, the company is still distant from profitability and it looks like Amazon Seller Services would take several years to break even.