BusinessE-Commerce

Amazon’s income double as things take a U-turn for the company in China

Amazon.in Box on a table

Amazon in India has been more than successful. It has managed to outlast most of the Indian e-commerce companies barring one. It has, right now, one major competitor backed by an American giant which is a major problem. The losses faced by Amazon in India were relentless and it was hard to operate because of the new FDI policy. Even after such a blow, the company has remained faithful to the Indian people and the country.

Amazon India faced $45 billion in losses when the FDI policy took effect. These losses were extremely high and caused a lot of hiatus at the headquarters in India. However, the company has bounced back and the pendulum is steadying itself. There is no specific reason but just hard work of the employees that have taken Amazon out of the hole they were in.

That being said, Amazon’s first-quarter income has been revealed. It has been doubled since last time investments because the company needs to move forward in certain areas. The high spending will be even higher in Q2 as the company needs to build more warehouses in order to increase functionality.

Chief Financial Officer of Amazon, Brian Olsavsky said that the Q1 profits are a result of investments made in the previous quarters. However, the second quarter will be full of investments and the reason is mentioned above. “We’re banking the efficiencies of prior investments, continued into Q1. There’ll be times when we have to invest ahead to build out warehouse capacity, but right now we are on a nice path where we are getting the most out of the capacity we have,” he told a bunch of reporters.

The second half of 2019 is going to be bigger for Amazon as it is going to give out more and more benefits to the Prime members all over the world. The company is going to invest a lot of money in order to do the same. The user base of the company has given rise to a huge number of sellers and people advertising on its platform. This leads to profits and monetizing its website is even more profitable. All of this is because of loyal customers.

The revenue of the sellers jumped by 20% while the ad and other sales increased by 34%. The seller revenue was about $11.1 billion while the ad and other sales revenue were about $2.7 billion. The Amazon Web Services also saw a huge growth of about 41% which hit the $7.7 billion mark in the first quarter.

That being said, the company is on the right path and it will be interesting to see how it goes about its business in the second half of the year. It is going to tough as its business in China saw a downhill struggle while it closed almost everything except for its global store.

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