Status: 07/30/2021 9:43 a.m.
The worldwide corona restrictions caused an unprecedented boom at Amazon. That is changing now. The best thing for the US group is online trading.
Sales of the world’s largest online retailer and cloud provider Amazon fell short of expectations in the second quarter. In addition, the group warned in the evening of weaker growth in the summer months. The reason is the elimination of the corona restrictions in many countries. Given the advancing vaccination campaigns around the globe, more and more retailers have reopened their stores, which is why people were shopping less online, according to the group. The elimination of the restrictions on going out also contributes to the fact that brick-and-mortar retail will be strengthened, while online purchases will decrease. Therefore, sales in the current third quarter should “only” grow by 10 to 16 percent – after a plus of 27 percent in the spring.
The warning was badly received on the stock market: Amazon shares fell seven percent after nearly doubling since spring 2020. Although sales were above the $ 100 billion mark (namely at $ 113 billion) for the third time in a quarter, industry observers had expected a little more. They were satisfied with the profit, which rose 50 percent year-on-year to $ 7.8 billion.
Cloud computing is the most profitable branch
Amazon did not achieve the strongest growth in online trading, but – as in the past – with a branch that is less well known to the public: cloud computing. This means the use of data via the Internet that is not held on site on local computers. This division called AWS (“Amazon Web Services”), which has been booming for years, increased its revenues by 37 percent to 14.8 billion dollars in the past quarter. In addition, AWS is the Group’s most profitable division. Here, 60 percent of Amazon’s pre-tax profit is generated, although sales only contribute 13 percent to group sales. According to estimates, AWS ‘market share is now a good 30 percent. This means that the division is roughly level with the US group Microsoft, which is considered the market leader in cloud computing, followed by AWS and Google.
The new Amazon boss Andy Jassy has set himself the goal of overtaking Microsoft and becoming the undisputed market leader. To achieve this goal, he has agreed on a partnership with the cloud specialist Salesforce from San Francisco. The corporations are working together to drive global expansion. From 2023 cloud computing will also be available for Amazon customers in the United Arab Emirates and Israel.
No compulsory vaccination for employees
In the second quarter, however, the division’s sales growth lagged behind that of its competitors Microsoft and Google. According to industry observers, the appointment of their long-time boss Andy Jassy as successor to group founder Jeff Bezos shows that this business is of central importance for Amazon. The 53-year-old Jassy took over the helm from Amazon on July 5th, replacing Bezos after 27 years at the helm.
Jassy has been with Amazon since 1997 and is one of the longest-serving executives in the group. He is also considered a close confidante of Jeff Bezos. He had announced his withdrawal from the day-to-day business of Amazon in February.
A completely different topic has top priority for the group these weeks: Similar to Google and Facebook, Amazon has set itself the goal of vaccinating all employees. According to the group, there should not be a compulsory vaccination.