Ecommerce News

amazon: eForestation when Amazon’s clearing; over 10,000 job cuts globally


Amazon is weeding out services in India, its fifth-largest market, as the slowest growth in holiday season revenue has forced it to cut 10,000 jobs globally, the biggest layoffs in its history. The job losses in India are likely to be in the hundreds as the ecommerce behemoth shutters services like meal delivery, online tutorials and wholesale supply of consumer goods to kiranas.

These are all business segments with entrenched local competition and are being weeded out in a corporate restructuring designed to weather recession in some of Amazon’s biggest markets. India, however, continues to remain one of the fastest-growing ecommerce markets and retains its draw even as foreign investment flows weaken.

Technology investments, both hardware and software, retained their top billing, although foreign direct investment (FDI) to India contracted in the first half of 2022-23. Inflows from over half the top sources of FDI, including the US, have been dialled back and the throttle rate is increasing by the quarter.

The funding winter for startups shows up in India’s FDI numbers after stable flows over the course of the pandemic that coincided with a spike in the number of unicorns. Technology company valuations have taken a tumble and India is not immune to more realistic appraisal of the path to profitability for digital businesses.
The business environment in India is also evolving rapidly. Big local groups like the Tatas and Reliance are moving into ecommerce, intensifying competition alongside Amazon and Walmart-owned Flipkart. Global technology companies are facing increasing scrutiny over market dominance with Google being ordered to allow more competition in its Android operating system and Google Play billing.

PhonePe and Google Pay have been given a deadline to bring down their market share in online payments. Regulatory changes proposed for telecommunications could increase the compliance burden of messaging services like WhatsApp. Amazon’s corporate rejig could be a signal for more selective bets in the Indian market.


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