Amazon Seller Services, the marketplace arm of Amazon India, has reported a 33 per cent surge in its net loss for the fiscal year ending March 2023, reaching Rs 4,854 crore compared to Rs 3,649 crore in the previous fiscal period.
According to regulatory filings, the company witnessed an almost 8 per cent increase in expenses, totaling Rs 27,283 crore, while revenue from operations experienced a modest growth of 3.42 per cent to Rs 22,198 crore.
Amazon Seller Services generates revenue from third-party seller services, subscription services (including Amazon Prime), and other marketplace-related services such as advertising revenue and marketing support services to related parties.
The company’s earnings from the sale/rendering of marketplace services rose by 33 per cent to Rs 12,548 crore in the last fiscal year. Revenue from other marketplace-related services, primarily ad revenue, surged by 30 per cent to Rs 5,380 crore. However, revenue from the sale/rendering of services to related parties declined by 46 per cent to Rs 4,269 crore.
Regarding expenses, the company’s spending on delivery charges increased by 1.6 per cent to Rs 6,863 crore, while advertising and sales promotion spending decreased by 6.3 per cent to Rs 3,209 crore. Total employee benefits expense grew by 27.46 per cent to Rs 2,795 crore.
In the fiscal year, Amazon Seller Services received a fund infusion of Rs 7,850 crore through the allotment of 7,850 million shares of Rs 10 each to its parent companies Amazon Corporate Holdings and Amazon.com Inc.
In its filing, the company noted that it has not altered the nature of its business, except for discontinuing the Alexa Auto offering under the Alexa Smart Vehicle (ASV) service, effective from March 31, 2023. It entered into a substitution with Amazon Digital Services for the transition of existing contracts related to the ASV offering from April 1, 2023.
Additionally, Amazon Seller Services, which includes the Prime membership program offering services like Prime Video and Prime Music, highlighted that production costs for original video content are capitalized and amortized to depreciation and amortization expenses primarily on an accelerated basis. The gross carrying amount of other intangible assets from digital video and music content surged by 38 per cent to Rs 8,789 crore.
The company mentioned that intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, which is the lower of five years and the license term for purchased video and music content and over five years for internally developed video content.
