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Amazon Pauses India, Canada Prime Day Over Covid Crisis: Report

Although Amazon previously confirmed that it is bringing Prime Day back to the second quarter, it appears not all countries will get to participate. The e-commerce giant is pausing the two-day sales event in India and Canada due to escalating Covid-19 cases, and has yet to announce a rescheduled date for either country, according to news reports.

Amazon would not comment on the matter.

India accounted for 46 percent of new global Covid infections in the week prior to May 5, crossing 20 million reported cases, the World Health Organization said. On Thursday, India reported 412,262 new virus cases and 3,980 deaths, both daily records.

With the rapid spread of the coronavirus throughout India this year—cases have doubled from 10 million in December—several states have stepped up restrictions in recent weeks, including local lockdowns and curfews. These include Maharashtra, which is India’s worst-hit state, Delhi, West Bengal, Uttar Pradesh, Rajasthan, Karnataka and others.

During lockdowns in March and April, India’s gross domestic product plummeted 24 percent. To make matters worse, the country’s vaccination efforts have encountered both supply and distribution problems—India has administered over 158 million Covid-19 vaccine doses as of May 4, in a country of 1.4 billion people. Only 2.3 percent of the population has been fully vaccinated, according to data research publication Our World in Data.

And in Canada, vaccination rates have significantly lagged the U.S., with only 3.2 percent of the country’s population fully vaccinated, Our World in Data says. In April, the country’s rate of new infections, measured in cases per million, overtook that of the U.S. for the first time since the pandemic began.

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Ontario, the country’s largest province, has been under an emergency stay-at-home order for weeks. The crisis became so concerning in the region that Amazon had to shut down a warehouse near Toronto for two weeks in March in the wake of rising infections.

Amazon’s delay of Prime Day in India comes as the company is looking to establish consistent growth in the market, amid increasing government scrutiny. At the end of the first quarter, Amazon India announced that more than 50,000 offline retailers and neighborhood stores joined its Local Shops on Amazon program in its first year. The program is designed to launch an e-commerce presence for local businesses that don’t already have one.

Amazon has committed to bringing one million Local Shops online by 2025, and has pledged $1 billion to small businesses in the market.

The e-commerce giant has a more entrenched presence in Canada, but revved up its investments in the market during the pandemic amid the anticipated increase in online spending. Amazon has increased its total logistics footprint by nearly 12 million square feet across nine major Canadian markets since the end of 2019, according to Colliers.

Covid-19 changed the plans of Prime Day 2020, with Amazon pushing the event back from its traditionally scheduled date in July to October, in turn essentially pulling the holiday season forward. The surge in online spending from the event, alongside competing events from other top retail players, contributed to a major headache for supply chains and delivery networks in the months after.

But for Amazon, Prime Day brought in a windfall of revenue, pushing the company past the $100 billion mark in quarterly sales for the first time, and $7.2 billion in profits. JP Morgan estimated that the holiday pulled in $7.5 billion, 42 percent more than it did in 2019.

While Amazon doesn’t reveal many specifics about the two-day impact, it did confirm that third-party sellers, most of which are small and medium-sized businesses, surpassed $3.5 billion in sales throughout the event—a nearly 60 percent year-over-year increase.

In the company’s first quarter earnings call, chief financial officer Brian Olsavsky laid out Amazon’s reasoning for returning the day to the second quarter in 2021.

“There are a number of factors: the Olympics, which are still out there this year,” Olsavsky said. “In fact, in some, many areas, July is a big vacation month. It might be better for customers, sellers and vendors to experiment with a different time period.”

Amazon has still yet to confirm the actual date of this year’s Prime Day event, although the lack of announcement in early May makes it more likely that the sale will be held in June. One April Recode report said that Amazon had targeted mid-to-late June for Prime Day on the grounds to appease Wall Street with an improved balance sheet during the second quarter as opposed to the third.

Prime Day, first held in 2015, has been a substantial growth driver of Amazon’s Prime members, which now top 200 million worldwide.