Coronavirus Update: Impact of Pandemic on Amazon’s Sales

The outbreak of the Coronavirus has taken the world by surprise. No economy was prepared to handle such a massive strain. With lockdowns a global phenomenon, the businesses are grappling to sustain themselves in such a dire situation. Small businesses are verge on collapse and are reportedly beyond any hope of recovery, while giants are struggling to keep themselves afloat. An unprecedented event such as this has never been witnessed in almost over a century.

Amazon – one of the giants in the world, has said that the biggest impact the company has to witness due to Covid19 lockdown has been in India. The company reportedly said that it has seen effects on its international business because of lockdowns in India. Similar to other companies in India, Amazon is now only fulfilling its essential goods services such as groceries.

The company is hoping for resuming its operations and increase its offering to leverage the business and therefore, further expand the offerings and operation after the Indian government announces that the company is allowed to resume operations. The company is in a bit of a holding pattern except for groceries in India until further notice.

It is worth noting, Amazon India’s head Mr. Amit Agarwal had marked the PMO and the Commerce Minister Mr. Piyush Goyal in his tweet. The tweet urged the government that it allows e-commerce firms to resume full operations. The company has faced similar restrictions in France as it was directed by the courts to deliver only essential products. Hence, overall the company has been in a bit due to restrictions that were imposed by the governments.

Amazon had announced an additional USD 1 Billion investment in India after the company’s founder visit. Amazon observed operating losses on its international business which is led by India. With losses amounting over USD 398 million compared to the losses of USD 90 million in the previous period. The company’s total sales grew over USD 75 billion compared to USD 59.7 billion a year ago. The company is also expected to spend USD 4 billion or more on Covid19 related expenses.

The expenses will include the safe delivery of products to the customers as well as protecting the employees from the virus. The expenses involve personal protective equipment, cleaning of facilities, higher wages for hourly teams, an effective path to ensure social distancing, and developing its own testing capabilities.