Amazon Says Biggest Impact of Coronavirus on Its Business Globally Has Been in India

Amazon CFO Brian Olsavsky said the coronavirus-focussed lockdown in India has “cut back a lot” on its offering.

By Jagmeet Singh | Updated: 1 May 2020 12:39 IST

Amazon Says Biggest Impact of Coronavirus on Its Business Globally Has Been in India

Amazon is struggling hard to generate sales during the lockdown in India

Highlights

Amazon CFO has highlighted the company’s tough time during earnings call
The e-commerce giant is mainly selling groceries in the country
Amazon and Flipkart have urged the government to ease rules

Amazon has seen the biggest impact of the COVID-19 spread on its business internationally in India, Chief Financial Officer (CFO) Brian Olsavsky said during its first quarter earnings call on Thursday. The US e-commerce giant that has a strong presence in the country is facing a tough time due to the national lockdown that has temporarily contracted its business to essential items such as home groceries. The coronavirus outbreak has also impacted the delivery fleet of Amazon and other online marketplaces in the country.

“I think the biggest impact internationally has been in India, where of course, we, similar to other companies in India, are now only fulfilling our essential goods such as grocery,” said Brian Olsavsky while answering a question on the difference in behaviour that Amazon has seen globally due to the COVID-19 pandemic.

“So that's cut back a lot on our offering, and we will further expand when the Indian government announces that we're allowed to resume operations. So we're in a bit of a holding pattern except for grocery in India,” he added. Other significantly impacted international markets for Amazon included France, where the company has shut down fulfilment centres thanks to a ruling by a French court.

Amazon Says Coronavirus Expenses Hit Q1 Earnings, Q2 May Be Worse

Struggling to generate sales due to lockdown
Amazon and arch-rival Flipkart are currently struggling to generate sales through their online marketplaces due to the lockdown that is in place until May 3. The initial phase of the lockdown, which was imposed on March 24, completely halted the operations for online marketplaces as authorities closed warehouses and forced delivery fleets to stay at home. Things got a little easier in the following days. However, since the government has restricted their operations just to essential items, both Amazon and Flipkart aren't yet able to sell large-ticket products online.

The government did show signs of giving e-commerce companies some relaxation earlier this month, though it u-turned and retained the earlier restrictions. However, both Amazon and Flipkart urged the government to ease sales of non-essential items during the lockdown. The companies also agreed to follow the Standard Operating Procedure (SOP) drafted by the government to ensure safe e-commerce operations through their platforms.

Not getting attention for groceries as well
Although Amazon and Flipkart have their grocery businesses to retain some customers and create some revenues, both aren't able to compete with the likes of BigBasket and Grofers that are fulfilling a large amount of grocery demands in the country. New players including Swiggy and Zomato have also joined the race recently to make things even tougher for the two dominating e-commerce companies.

Earlier this week, Amazon partnered with the Indian Railways to start delivering essential orders through Special COVID-19 Trains in the country during the lockdown. The Seattle-based company also launched its ‘Local Shops on Amazon' programme to start listing local shopkeepers and offline retailers as its sellers. But nonetheless, both moves are yet to show positive results to the company.

How are we staying sane during this Coronavirus lockdown? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts or RSS, download the episode, or just hit the play button below.

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