Seattle-based Amazon, known for its strategy of investing in the future, has reported a 77 percent plunge in profits to $197 million from $857 million a year ago in the second quarter. The sharp fall in profit has been attributed to the investments the company is making in faster growing economies like India and in video content, Reuters reported. It could lose up to $400 million in operating profit during the current quarter, Reuters reported.
Unlike China, e-commerce is immature in India with many parts of the country not being fully penetrated, says Sanchit Vir Gogia, Chief Futurist, Founder and CEO of Greyhound Knowledge Group, a strategy and transformation research, advisory and consulting group. “With consolidation happening in the Indian e-commerce arena, this is the time Amazon should invest more heavily here. The competition is going to get intense with the earlier confusion — caused by having too many players, has been whittled down with consolidations,” Gogia said.
There will be only three big players in the e-commerce space in the country, believes Gogia, viz. Alibaba via Paytm, Flipkart, and Amazon, though not in that order.
India will not be that easy for Amazon though. It may be leading in Cloud, but faces competition from IBM, Google and Microsoft who are getting more competitive in India. “Amazon will have to work hard on that front too to retain its lead,” Gogia said.
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Sanchit Vir Gogia: Sanchit is the Chief Futurist, Founder & CEO of Greyhound Knowledge Group, a Global Strategy & Transformation Research, Advisory & Consulting Group. He also serves as Chief Analyst & CEO of Greyhound Research, a Global, Award-Winning, Independent Technology & Innovation Research, Advisory & Consulting firm. To read more about him, click here.
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