Amazon says India is where the biggest covid-19 impact on its business is
“There’s obviously timing differences between countries on when it is hitting certain countries and when it is — maybe where they are in their curve and flattening their curve and all that,” Amazon vice president and chief financial officer Brian T. Olsavsky said in an earnings call. (Reuters)
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. Updated: 01 May 2020, 09:41 AM IST
The online retailer is currently fulfilling demand for only essential goods such as grocery in the country Grocery forms a small part of their overall business, which relies heavily on the sale of electronic goods, mobile phones
BENGALURU: Global e-commerce major Amazon, in its first quarter results, said the biggest impact of the covid-19 crisis continues to be in India. Owing to the lockdown, the company said that it is fulfilling only essential goods like grocery and has cut back a lot on Amazon’s offering in the country.
“I think the biggest impact internationally has been in India where, of course, similar to all companies in India, we’re now only fulfilling our essential goods such as grocery, so that’s cut back a lot on our offering and we will further expand when the Indian government announces that we’re allowed to resume operations. So we’re in a bit of a holding pattern except for grocery in India,” said Brian T. Olsavsky, senior vice president and chief financial officer in an earnings call.
Amazon’s CFO also said that the covid-19 crisis has played out differently in different geographies. Amazon has also been seeing a lot of consistency in the types of products that people are buying with the stay-at-home restrictions.
“There’s obviously timing differences between countries on when it is hitting certain countries and when it is — maybe where they are in their curve and flattening their curve and all that,” added Olsavsky.
In the earnings call, Olsavsky also said that while Amazon generally has experience in getting ready for spikes in demand for known events like the holiday season and Prime Day, the covid crisis allowed for no such preparation.
In India, e-commerce firms such as Amazon and Walmart-owned Flipkart have been allowed to deliver only essential goods during the 40-day lockdown that ends Sunday. Essentials such as grocery form a small part of their overall business, which relies heavily on the sale of electronic goods, mobile phones and fashion products.
In response to the crisis, Amazon says that it has established rigorous safety and cleaning protocols including maintaining six-foot social distancing, procuring 100 million masks, tens of millions of gloves and wipes and other cleaning supplies.
“We began requiring temperature checks across our operations network, in our Whole Foods stores (in the US) we added plexiglass barriers between cashiers and customers and reserved special hours for senior customers to shop. We temporarily raised wages and overtime premiums, we funded a new Amazon Relief Fund and we allowed employees to take unpaid time off at their discretion,” said Olsavsky.
To deal with the unprecedented demand, Amazon also said that it hired an additional 175,000 new employees, many of whom were displaced from other jobs in the economy.
Amazon, internationally, has also taken steps to cater to demand for non-essential products while reducing its marketing spend.
The Amazon global network has also pivoted to shipping priority products within one to four days and extending promises on non-priority items, added the Seattle-based ecommerce major.
“We increased grocery delivery capacity by more than 60% and expanded in-store pickup at Whole Foods stores (in the US) from 80 stores to more than 150 stores, and other Amazon teams shifted their focus to directly helping customers in the overall effort to fight the covid virus,” he said.
Amazon also said it estimates that testing (for covid-19) will cost it $300 million in Q2.
“We’ve put some of our best people on it. I think everyone is trying to get testing. It’s not readily available on the scale that we need it for — to test our scale of employees … and again we’ll see how we do that differently and I don’t know, again, about future business opportunities,” said the CFO.