Early Diwali hurts Amazon's Q3 growth

BENGALURU: Amazon.com Inc said quarterly growth has dropped noticeably, partly due to the Diwali holiday in India being spread over two quarters this year against last year.

“There has been a noticeable drop in run rate, between Q3 and Q4, generally on the lines of about 300 basis points. The Diwali holiday in India was all in Q4 last year and a bit of it was in Q3 this year…,” chief financial officer Brian Olsavsky said during the company’s third quarter earnings conference call, adding that a consumption tax impact in Japan was another reason for the drop.

“It’s a bit about the law of large numbers and the differential between growth and holiday season, that’s very tight few weeks of the holiday season versus the rest of the year,” he said.

According to analysts, online retailers Amazon and rival Flipkart sold goods worth $3 billion, or about Rs 21,380 crore in India during the first leg of the festive sales period, a growth of 30% over last year despite a challenging macro environment in the country. The number is, however, less than $3.7-$3.8 billion gross merchandise volume (GMV) that analysts had predicted.

Analysts said Amazon’s India business reduced the gap between it and Flipkart in smartphone sales, benefitting from exclusives with Samsung, OnePlus and better offers on the iPhone XR. Smartphone sales form the largest category in etailing.


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