Amazon is gearing up for its Diwali sale this year and will continue to invest in infrastructure and technology in India, as it anticipates a stable policy environment here after its continued engagement with the Indian government, a top executive said.
“Our engagement with the Indian government makes us optimistic about partnering and collaborating to seek a stable predictable policy that allows us to continue investing in our technology and infrastructure,” said CFO Brian Olsavsky during the company’s second quarter earnings conference call.
Amazon said that it has doubled the number of paid Prime members in the last 18 months and invested heavily in its global selling programme which helps Indian sellers reach other geographies around the world.
“We’re looking forward to the Diwali holiday this year,” he added.
India introduced clarifications to its FDI norms for online retail industry through a Press Note 2 in December last year. The rules which affected the workings of large e-commerce marketplaces like Amazon and Walmart-owned Flipkart bars online marketplaces and their group companies from owning their vendors and prohibits them from controlling the inventory sold on their platforms.
But Amazon said the revised rules, which came into effect in February, have had little to no impact on their businesses.
In a meeting with e-commerce and Internet companies last month, commerce and industry minister Piyush Goyal questioned Flipkart on its company structure and how it was offering discounts to consumers. In another meeting with foreign internet companies earlier last month, he said that India will not allow multi-brand retail as the government needed to protect the interests of small offline vendors.
Amazon had pulled down listings of products sold by its two largest sellers Cloudtail and Appario for a week after the implementation of PN2, but introduced all the products quickly. The company reduced its stake in the parent companies of the two sellers to under 25%, essentially making them non-group entities after the revised rules said group companies of marketplaces would not be allowed to sell directly on their platforms.
Globally, Amazon reported its first profit miss in two years, and said its push for one-day delivery will see income slump in the current quarter. Amazon’s profit inched up to $2.6 billion in the quarter, short of $2.8 billion that analysts were expecting, according to IBES data from Refinitiv.
