Amazon’s Earnings: Tracing the Impact of the Indian Push
$47.5 billion in retail e-commerce sales
Amazon (AMZN) made a commitment to invest $5.0 billion to grow its business in India as it pursues new opportunities abroad. Amazon’s Indian push encompasses investments in the country’s e-commerce, digital video, and cloud computing industries.
India’s e-commerce industry is growing rapidly, with retail e-commerce sales forecast to reach $55.3 billion by 2018 from ~$39.5 billion this year, according to market intelligence firm eMarketer. Amazon is facing off with affiliates of eBay (EBAY), Walmart (WMT), and Alibaba (BABA) for control of India’s e-commerce industry.
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Battle for India’s cloud computing market
In India’s digital video market, Amazon is battling competition from Netflix (NFLX) and several local rivals. India’s cloud computing market has expanded and attracted more players, and Microsoft (MSFT) is one of Amazon’s notable cloud computing rivals in the market.
Research firm Gartner predicts that India’s public cloud market could be worth more than $4.1 billion by 2020, as shown in the chart above.
India leads Amazon to deeper losses
Amazon (AMZN) doesn’t break out its Indian sales but reports them under its International segment. In 2Q17, Amazon’s International revenues rose to $11.4 billion from $9.8 billion in 2Q16.
Despite the growth in its top line, the International segment’s losses ballooned to $724 million in 2Q17 from $135 million in 2Q16. The sharp spike in these international sales and losses can be attributed to Amazon’s aggressive investments in India—one of its key bets outside North America.