Amazon on Thursday said that India was the most impacted among all its international businesses by the ongoing Covid-19 pandemic as the government here has mandated e-commerce companies to only fulfil orders of essential goods such as groceries.
The company said that it has had to cut back a lot on its offering in the country due to this, but will expand once the Indian government gives e-commerce companies the green light to resume operations.
“We’re in a bit of a holding pattern except for grocery in India,” said Brian Olsavsky, Chief Financial Officer at Amazon, in a call with analysts after the company’s Q1 earnings announcement.
Amazon’s earnings showed that the e-commerce giant has been able to grow its business amid the pandemic, with revenue rising 26% to $75.5 billion in the first quarter. However, profit fell to $2.5 billion, down from $3.6 billion in the same quarter last year, owing to increased spending on Amazon’s Covid-19 response.
Amazon’s International sales, which accounts for all its businesses outside the US, grew 18% to $19.1 billion in the first quarter, while losses more than quadrupled to $398 million compared to the year-ago period.
However, India’s curbs on e-commerce kicked in only from March 22, or almost at the end of the first quarter, meaning the impact of restrictions on online platforms from selling non-essential goods isn’t known yet.
Further, Amazon forecasted that it would spend a massive $4 billion in the second quarter on coronavirus-related expenses, which include getting orders out to customers and also keeping its employees safe.
“This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own Covid-19 testing capabilities,” Jeff Bezos, founder and CEO of Amazon, said in a statement.