India investment drove international growth
India is one of Amazon.com’s (AMZN) closest-watched overseas markets, and for good reason. The company plans to invest $5.0 billion to grow its business in India, and it could end up investing more in the country to stay ahead of rival Alibaba (BABA), which is investing in everything from mobile payments, to e-commerce, to cloud computing in India.
But it’s not just Alibaba that’s keeping Amazon executives in India awake at night. There’s also Flipkart, an Indian homegrown e-commerce provider backed by heavy weights such as eBay (EBAY), Microsoft (MSFT), and Tencent (TCEHY).
India is believed to have contributed to the 29% YoY (year-over-year) growth in Amazon’s International segment revenues, which reached $18 billion in 4Q17.
“India continues to be a good story for us,” noted Amazon’s chief financial officer, Brian Olsavsky, during its 4Q17 conference call.
International loss rose to $919 million
However, aggressive overseas investments, including about $1.0 billion injected into the Indian unit in the second half of 2017, deepened Amazon’s International losses. Its international operating loss widened to $919 million in 4Q17 from $487 million one year ago.
Over 25 million items eligible for Prime deliveries
In India, Amazon can be seen playing to its strengths and trying to stay ahead of the competition. The company recently disclosed that it signed up more Prime members in the first year of the program in India than it has ever seen in any other country where the loyalty program has launched.
To draw more Prime members in India, Amazon has continued to expand the selection of items available for free delivery under its Prime subscription. Indian shoppers on Prime membership can now select from over 25 million items for free deliveries. The company is also expanding its entertainment menu for Prime subscribers in India, with the recent release of new original shows on its Prime Video service for the Indian audience.
Continue to the next part for a closer look at the impending Amazon-Alibaba showdown in India.