Amazon’s key initiatives from Q2’17 earnings report
Amazon reported its Q2’17 earnings which highlights the growth it is witnessing across its service offerings. It also provided a quick view into Amazon’s key initiatives planned for 2017 and beyond.
A look at Amazon’s Q2’17 financial results
Quarterly revenue reported to increase 25% year on year to $38 billion. This sharply contrasted the trend of brick-and-mortar counterparts in the industry. The report also mentioned a decline in quarterly net income by 77%.
Comment by Amazon’s CFO Brian Olsavsky’s highlighted Q3 as being a high investment period, is expected to show soft financial results. This would result further decline in income in Q3. Shares of Amazon hit all time high of $1,083 before plunging close to $1,000 on account of lower earning. Here is the snapshot of its sales vs year-on-year growth:
Amazon’s key initiatives to drive its future growth
Amazon’s key strategic initiatives provide a good insight into the strong growth which lies ahead for the next decade. Here is a list of key initiatives listed in Amazon’s earning report:
- Amazon’s increased interest in video content development
- Exhibited by comments from CFO on higher investment in video content and streaming going forward in the year
- Amazon’s continuous investment in strengthening logistics networks for achieving faster shipping
- announced 2 hour shipping in Singapore
- Amazon’s strong focus on converting trial subscription members to paid subscribers
- 51% increase in subscription sales in the second quarter to $2.2 billion. Backed by these results, analysts are estimating Amazon to have more than 50% US households on its subscriptions services by end of 2017
- Amazon is Eying significant expansion in Asia targeting to be a leading retail player in major markets
- $5 billion investment in India
- Expansion in middle east on back of its acquisition of Souq.com
- Amazon Web Services expansion in France, Sweden and China
- Quarterly revenue grew 42% to $4.1 billion year over year
- Expansion into grocery and consumables market – aggressive bid for Whole Foods Market pending regulatory approval
- Here is a link to our analysis of Amazon’s bid to acquire Whole Foods Market
- Further expansion of its private label brands portfolio
- On back of its proposed bid for Whole Foods Market, Amazon recently was in news to meet with organic food suppliers. This could mean its consideration of private label food products, which is similar to other large grocery retailers’ product offerings
What to expect in future from Amazon
On the back of above initiatives, Amazon is becoming a massive retailer, logistics services provider, mass manufacturer, web services provider and entertainment power-house. If the past is considered its evidence of Amazon’s ability to execute, then we are very close to witnessing Amazon’s rise to be a monopolistic empire!
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