Amazon.Inc said it will provide a 10% waiver on its seller commission on all orders placed on June 5 as part of its celebration of its tenth anniversary of operations in India.
Further, customers shopping on Amazon.in on June 5 will also get a 10% cashback of up to Rs 250 on transactions of Rs 1,000 and above.
In the last 10 years of operations, Amazon's seller base in the country has grown from 100 to over 12 lakh. "Many sellers have turned crorepatis. Over one lakh Indian sellers are now exporting globally through Amazon," the company said in a blog post.
However, that growth has come through over $6.5 billion in investments in the country, and the company hasn't turned profitable yet.
"The growth has come at a high cost invested to date, while profitability remains elusive," AllianceBernstein Holding LP said in a note on Aug. 30, 2022.
The Jeff Bezos-founded e-commerce platform also "faces immense competitive pressure in fast-growing categories, weaker value proposition in ‘new' commerce, limited traction in tier II and III cities, and an unfavourable regulatory environment for outsiders," the brokerage said.
Amazon has struggled to scale volumes in higher-margin categories, such as fashion and beauty, while the inability to operate a first-party model has limited the availability of private labels versus competition, which further pressures margins. "Amazon's management attrition has also increased recently, potentially signalling difficulties achieving the desired scale," Bernstein said.
Also, the regulations in India limit Amazon to operating via a third-party seller model, it said.
"Regulations don't allow for an inventory-led or first-party model for a foreign entity like Amazon. The company has made investments into Shoppers Stop (fashion), More (grocery), and a rumoured stake in Ecom Express (logistics), but integration has been limited as the regulations don't allow for full control."
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