Had A Strong Prime Day In India, Diwali Off To A Good Start: Amazon CFO

Amazon clocked a profit of $407 million in its international business, helped by an increasing number of people buying online.

Amazon’s net sales increased 37 per cent to $96.1 billion in the third quarter, compared to $70.0 billion in third-quarter of 2019. Despite the Coronavirus (Covid-19) pandemic, Amazon’s net income tripled to $6.3 billion in the third quarter, compared to a net income of $2.1 billion, in the same period in 2019.

The e-commerce giant will continue to invest in international markets including India, where the volumes are growing. Brian T Olsavsky, senior vice-president and chief financial officer, Amazon, said the company is seeing an advancement of volume and very strong volume, especially in countries in Europe and Japan. The company may be putting away future volume onto this year's cost structure

"That is why you're seeing profitability in international (markets). We are still investing ahead of the US in a lot of dimensions internationally, things like Prime benefits, devices (and) international expansion. We're committed to continuing (the level of investments) even after the pandemic,” said Olsavsky during the Q3 earnings call. “And included in the international segment, of course, is India where we had a very strong Prime Day, and Diwali is off to a good start,” he said.

He also said the high volumes and the leverage Amazon is seeing, particularly in places like the UK and Germany, is creating profitability ahead of schedule.

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This month, Amazon witnessed the biggest ever opening for sellers and brand partners during its flagship festive sale Great Indian Festival (GIF) in the country. The month-long event began on the midnight of October 16 with early access for the Prime members and opened up for all customers on October 17. The company said the largest number of new customers shopped for the first time on Amazon.

Orders came from 98.4 per cent of India’s pin-codes in 48 hours. It has been our biggest 48 hours in the history of Amazon India, overall in terms of value and unit sales, said Olsavsky. About 91 per cent of new customers came from smaller cities.

In August this year, Amazon India also closed its 48-hour Prime Day sale with a 10-fold rise in business from the pre-pandemic levels, according to the sources. Without divulging the amount of sales during the annual event, the e-commerce firm attributed the success to small and medium businesses (SMBs) who participated in large numbers as sellers on the online marketplace.

Around 91,000 small and medium businesses, artisans, weavers and women entrepreneurs across 5,900 pin codes achieved the highest ever day of sales during the Prime Day. Of these, more than 62,000 sellers were from non-metro and tier-2 and tier-3 cities.

“Offering jobs with industry-leading pay and great healthcare, including to entry-level and front-line employees, is even more meaningful in a time like this, and we’re proud to have created over 400,000 jobs this year alone,” said Jeff Bezos, Amazon founder and CEO. “We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season,” he said.

In India, Amazon announced the expansion of its operations network with 10 new fulfilment centres, 5 new sortation centres, nearly 200 delivery stations, and over 100,000 seasonal jobs to help meet customer demand during the festive season. The company also launched an all-women delivery station in the state of Gujarat. This initiative is the second of its kind in the country and part of the company’s ongoing efforts to provide more opportunities for women to build careers at Amazon.

Highlights:

*Amazon clocked a profit of $407 million in its international business in Q3

*Net sales increased 37% to $96.1 billion.

*Net income tripled to $6.3 billion in the third quarter.

*Amazon witnessed the biggest ever opening for sellers and brand partners during its Great Indian Festival (GIF) sale.

*It had a very strong Prime Day in India.

*Amazon has announced 100,000 seasonal jobs to help meet customer demand during the festive season.