Amazon has doubled its net income in the second quarter of this financial year, giving hope to the e-commerce service industry. It has been largely attributed to more online purchases in the US and internationally.
Here’s what we’ve learned from Amazon’s latest financial report.
- Net sales spiked by 10%.
- Net income doubled to $13.5 billion from $6.7 billion.
- International sales increased by 7% to $31.7 billion.
The 10% increase in net sales took Amazon from $134 billion in the same quarter in 2023 to $148 billion this financial year.
Amazon president and CEO Andy Jassy has isolated the “continued reacceleration in AWS growth” as the reason for its double-digit net income of $13.5 billion.
Jassy says more companies are modernizing, and Amazon hopes to lead the charge.
Amazon’s real cash cow
How can Amazon weather the storm while most retailers struggle to make sales? According to the Financial Times, its cloud computing business, AWS, could bring in the actual profit.
Here’s how it’s raising the profit margins:
- The AWS segment sales increased 19% year-over-year to $26.3 billion.
- AWS segment operating income is $9.3 billion; it was $5.4 billion in Q2FY23.
E-commerce resilience
Amazon’s resilience in domestic and international sales is giving hope to the sector and signaling a broader, robust demand for online shopping.
Despite economic fluctuations, consumer behavior continues to prioritize online shopping. This could underline the necessity for businesses to continue investing in their online presence and customer service.
Business strategies to cope like Amazon
Amazon has remained solid despite signs of a slowing US economy and concerns over softening consumer spending.
The retail giant has focused mainly on three aspects: diversifying investments, focusing on consumer experience, and adapting to change.
Diversifying investments could mean investing in innovative technologies and startups to complement your core business. This can open new revenue streams and mitigate the risk when the economy is slowing down.
Customer experience is what will turn shoppers into loyal shoppers. You can prioritize delivering an exceptional customer experience and support throughout the delivery process.
Staying adaptive is necessary to respond to constantly changing markets. Continuously monitoring market trends, gathering feedback, and being ready to innovate are important to staying competitive.
NOW READ: Amazon taps new markets for growth
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About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
