Amazon saw 6% growth in new India customers with recent festive sales

US online retail giant Amazon has said that it witnessed 6 per cent growth in new customer additions in India, thanks to its festive season sales that kicked off in early October. The growth came on the back of yet another quarter of subdued growth in international sales, which includes India, in the quarter ended September.

On a call with analysts on Thursday, Brian T Olsavsky, chief financial officer at Amazon.com, attributed part of the growth slowdown in the company’s international business to festive sales in India being pushed completely to the fourth quarter, unlike in the previous year. The company reported a revenue of $15.5 billion from its international business during the quarter.

“On a year-over-year basis, I think you have to look at two things. We did the Souq acquisition last year in May. So the full pick-up on that year-over-year was in 2017 and now we're lapping that. There's also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they'll be fully in Q4,” Olsavsky said.

While growth of its earnings from international markets slowed, Amazon continued to reduce its losses, which came down to $385 million in Q3 from $494 million in Q2. On a year-on-year basis, that represents a nearly 2.5 times reduction in losses from international sales for Amazon. It had reported a loss of $936 million in Q3 2017.

This comes despite Amazon continuing to invest heavily in India, with the investment pegged to top $2 billion in the current financial year. The company has already pumped in over 77 billion in three tranches of Rs 26 billion, Rs 23 billion and Rs 27 billion into its India business in May, July and August respectively.

Amazon says it’s buoyed to keep investing in India as it sees good uptick in sales and a far-reaching presence in the country. It is also looking to overtake local rival Flipkart which is now backed by Walmart. The US retail giant picked up 77 per cent stake in the Indian company for a massive $16 billion this year.

“India, although Diwali moved into Q4, so far is going really well. We've seen great response from customers. We've had 6 per cent growth in new customers during the period. Orders are coming in from 99 per cent of the pin codes in the countries. So, great first wave of what we call the Amazon's Great Indian Festival, which just lead into Diwali,” added Olsavsky.

Amazon reported record profits of $2.9 billion for the third quarter on Thursday with sales climbing nearly 30 per cent to $56.6 billion. But investors penalised the stock for missing street estimates, which had been set higher due to expectations of strong sales performance during the company’s Prime Day sales event which took place in the quarter.

While Amazon’s stock price was up 7 per cent at $1,782.17 when the markets closed, it fell to $1,668.01 in after-hours trading.