Amazons sales growth slows but profit increases

Amazon has posted a slower sales increase of 17 per cent to $59.7bn in the first quarter of 2019 as it announced new delivery plans for Prime customers.

Amazon’s sales growth in the first quarter of 2018 was 43 per cent which represents a sharp slow down in year-on-sales. Despite this, the firm posted a $3.6bn profit as its cloud computing, web services and advertising arm continued to drive earnings for the company. Amazon Web Services made $7.7bn in revenue up 41 per cent from the same quarter last year and $2.2bn in profit.

The firm plans to invest $620m into a one-day shipping service for Prime members, improving the current two-day shipping service offer. The firm also reported that 30m people were now using their Fire TV stick, which is integrated with Alexa, to stream TV shows from the BBC, Netflix, Amazon’s video service and others.

eMarketer senior forecasting director, Monica Peart, commented, “(There was) a larger than expected slowdown in other revenues after a record year of growth showcases the moderating sales for third-party sellers as the platform seeks to maximize profitability, at some cost to these sellers.”

Despite the hugely profitable quarter, it hasn’t always been smooth sailing for Amazon which recently made the decision to stop the ability to order products from third-party sellers from its Chinese website. The firm also cancelled plans for its New York City headquarters after local political opposition forced the company to look elsewhere. On top of that, CEO Jeff Bezos divorced from his wife where he had to hand over 25 per cent of the company’s stock, worth around $35bn.