Global e-commerce player Amazon has registered a jaw-dropping 77 per cent decrease in its profits to $197 million from $857 million a year ago in the second quarter. According to a Reuters report, this disappointing decline in profits is courtesy the company's growing investments in developing economies like India and in video content. The report also noted that the company could end up losing up to $400 million more in operating profit during the current quarter.

Even though the company's profits dived tragically, the week saw Amazon founder Jeff Bezos displacing Bill Gates as the world's richest man on real-time billionaires index compiled by Forbes, even though the glory was only for a brief period. Within a day, Gates won back the spot fair and square after Amazon shares pared their gains in a reaction to the results. According to analysts, this is a testimonial of investors' undivided confidence in Bezos and his business strategy.

While Amazon might be experiencing a sharp cut in its riches, it is still focused on continuing its investment spree in India. According to Harish HV, Partner, India Leadership Team, Grant Thornton India LLP, Amazon, whose valuation currently stands at a strong $500 billion, is in India for a long haul as it considers the country has a huge potential.

Considering Amazon has less than 1 per cent market share in China's $378 billion e-commerce business, the company has its eyes set on India as it is the only market that is capable of matching China in size. Not only can India match China, the country even has the potential of racing past China as it doesn't have cultural and linguistic biases similar to China.

According to experts, e-commerce in India is still in its nascent stage when compared to the industry in China. Further, the country is currently undergoing a consolidation phase when it comes to e-commerce and Amazon wants to take advantage of this situation and firm its feet further in the country.

If and when the Snapdeal-Flipkart merger goes through, one can expect to have only three big e-commerce players in the country: Flipkart, Amazon and Alibaba via Paytm.

Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent. The company is working hard to get a larger share of the $30 billion Indian e-commerce market.

Flipkart, which currently enjoys a customer base of 100 million users plans on increasing the number to 500 million customers in the coming years. The company, which is in its tenth year of operation, is currently hosting a number of activities to celebrate the joyous occasion.

However, unlike Flipkart, Amazon is a veteran in the e-commerce space as it has been operating in the US for 23 years now.

But, it is not just Amazon that is experiencing a cut in its profits. According to Kotak Institutional Equities, the e-commerce sector on the whole is currently reeling Rs 10,670 crore in losses.

Amazon does have an upper hand over Flipkart because of its deep pockets as unlike the latter it doesn't need to run to its investors for their approval every time it wants to push forward and scale up. Though Flipkart is currently the reigning king of the ecommerce market with a 57 per cent share in the market, one can expect Amazon to take over the numero uno position in no time if it keeps at its pace in the country.

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