Amazon sales soar as profits fall in expansion push

Gladys Abbott
July 29, 2017

Operating loss in Amazon's worldwide business, fuelled by its aggressive growth in India, plunged to a record $724 million in the June quarter from a loss of $135 million in the corresponding year-ago period. The deal is expected to be completed in the second half of this year.

Amazon Prime Video recently launched Inside Edge - the first of its planned 18 Indian original series.

Amazon.com Inc Chief Executive Jeff Bezos has unseated fellow tech billionaire Bill Gates as the richest person in the world, profiting from the e-commerce company's meteoric stock rise to reach a fortune of $90.6 billion, Forbes reported. In the last few months, we launched Echo Show (our newest Echo device with a video screen), introduced Amazon Channels in both the United Kingdom and Germany, launched four new Fire tablets, expanded Amazon Fresh to Germany, launched Prime Now in Singapore, hired more than 30,000 new employees, launched more than 400 significant AWS features and services, migrated more than 7,000 databases using AWS Database Migration Service, and held our third annual Prime Day - signing up more Prime members than ever before.

Indeed, investing in faster shipping and video has become a refrain of sorts for the company.

Subscription sales including Prime fees rose 51 per cent in the second quarter to $2.2 bn.

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As competition in the Indian e-commerce market intensifies with online retailers depending on heavy discounts, the race for higher market share has taken a toll on Amazon Inc's worldwide business.

Amazon.com has reminded investors that luring shoppers away from stores and dominating the cloud-computing industry is not cheap.

Mr Olsavsky declined to discuss in detail the company's strategy for the upscale grocer but said, "We really think it will be a big boost for us as we expand our grocery and consumables offering". Meena said demand for the Echo and Alexa platform in India will depend on pricing and may not significantly bump up sales for Amazon India.

"You tend to expect companies like this to grow their expenses at a slower rate than their revenues", said Michael Pachter, analyst at Wedbush Securities.

Second-quarter expenses increased 28 per cent to US$37.3b, the Seattle-based company said. Costs for fulfilment, marketing and technology all rose.

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