Profitability remains elusive for Amazon in India despite $6.5 billion investment: Report
India is one of few large and under-penetrated e-commerce markets with retail penetration of 5% compared to the global average of 14%.
Published: 01st September 2022 09:07 PM | Last Updated: 01st September 2022 09:07 PM | A+A A-
BENGALURU: India is one of the Amazon's biggest overseas markets but profitability remains elusive for the ecommerce company in the country.
It has invested over $6.5 billion over 9 years in India, says research firm Bernstein in its report Global Internet:A decade later, is Amazon India a success?
It also said that the company faces an unfavourable regulatory environment apart from immense competitive pressure in fast-growing categories, a weaker proposition in new commerce and limited traction in Tier 2 and 3 cities.
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India is one of few large and under-penetrated e-commerce markets with retail penetration of 5% compared to the global average of 14%. The report further said that India is a three-player market - Amazon, Walmart/Flipkart and JioMart.
Amazon leads on core categories and has done quite well in Tier 1 cities with 50 lakh Prime subscribers.
It further said that newer players such as the SoftBank-funded Meesho are winning the growing tier 2/3 cities where Amazon has struggled to gain traction.
According to the report, ecommerce spending in India is expected to touch $130 billion in gross merchandise value (GMV) by 2025, and online shoppers projected to increase by 2x to reach over 300 million.