Amazon stock fell 4% last Friday morning, after the company announced on a call with investors it may increase investment in 2019 and raised concerns about new regulation in India, CNBC reported.
During Amazon’s fourth quarter 2018 earnings call, Amazon CFO Brian Olsavsky said there is “much uncertainty as to what the impact of the government rule change is going to have on the e-commerce sector [in India]."
A new law that just went into effect to protect domestic sellers in India bans foreign e-commerce companies from negotiating exclusive agreements with vendors, as well as from selling items through vendors that they hold an equity stake in. As a result, both Walmart, which owns Flipkart, and Amazon have had to remove thousands of items from their websites, reports TheStreet.
“Our main issue and our main concern is trying to minimize the impact to our customers and sellers in India,” Olsavsky said.
While he wouldn’t comment on an investment forecast, Olsavsky did say he “would consider 2018 to be a lighter investment year and the lighter year for adding fixed headcount certainly compared to 2016 and 2017.”
The fourth quarter saw a spike in investment for Amazon. Total CapEx grew 33% in Q1, 1% in Q2, negative 1% in Q3 and then jumped 17% in Q4.