Amazon Will Continue To Expand Its Territory.

Tycoon

The second quarter earnings report released on that day showed that net profit increased by eight times compared to the same period last year, thanks mainly to the strong growth of its traditional electricity business and cloud services.

Amazon's net profit of $857 million in the quarter also hit its biggest quarterly profit record in history.

As Amazon has made profits for five consecutive quarters, people have gradually become accustomed to a "making money" rather than "losing money" of Amazon. The most frequently asked question of Amazon is no longer "whether it will be profitable in the next quarter", but "how much profit will be made in the next quarter".

There is no doubt that Amazon is now showing such strong profitability, which is directly related to its continuous investment and business expansion over the years.

Under the premise that the absolutely leading electricity supplier business and cloud service have been able to bring the stable profits to Amazon, the next step is to continue to open up territory and expand the territory. At the same time, it will further build the ecosystem around its electricity business and infiltrate into every aspect of people's life.

First, continue to expand the international electricity supplier business.

In the fifth consecutive profitable quarter of Amazon, although we saw that Amazon's international electricity supplier business in North America still had a $135 million operating loss, the loss has narrowed considerably compared with the 189 million US dollar loss in the same period last year.

At present, Amazon is still increasing investment in the international electricity supplier market, and India has become the key business development area of Amazon.

Amazon's founder and chief executive, JeffBezos, said in a statement released in the earnings report that Amazon has been around the world in the past quarter, especially in India.

It is very busy, in the quarter, Amazon in India "fast input", the new AWS regional center, the first open Prime member business and future member video service.

Amazon said in 2014 that it would invest $5 billion in the India market.

It is not hard to see that Amazon is still expanding in the international market, and the internationalization strategy of India and other key areas will be further promoted. Its revenue growth and narrowing of operating losses in the international market outside North America will continue in the coming period.

Two, cloud services to enhance profitability

Cloud service is undoubtedly the biggest highlight of Amazon's performance in recent years. At present, Amazon's operating profit from cloud service business has exceeded its operating profit in North America's electricity business. At the same time, Amazon's business is also the fastest growing business in all Amazon's business. This Amazon's leading position in the industry has become the engine of Amazon's growth.

In the second quarter, cloud service revenue increased by 58% compared with the same period last year. Compared with the growth rate of the electricity business in North America and the international electricity business, the growth rate was 28% and 30% respectively.

After earning $2 billion 880 million in the second quarter, Amazon's revenue from cloud services has exceeded $5 billion in the first half of the year. Without accident, this year's cloud services will complete the target of billions of dollars put forward by Bezos.

According to Amazon's plan, new AWS data centers will be set up in the future, including Ohio, China, the United Kingdom, South Korea and India.

In addition to the rapid growth in turnover, Amazon's cloud service is also the most profitable business, and its operating profit margin has reached nearly 25% level in the second quarter.

Because Amazon's own e-commerce business is more "heavy", the higher cloud service profit margin level is beneficial to improving the overall profitability of Amazon.

Three, Amazon Prime members and derivatives services to create an ecological circle.

In addition to the traditional electricity business and new cloud services, Amazon is gradually building a content centered ecosystem through its Prime members' derivative services and a series of hardware products.

At present, the Amazon Prime member who has an annual fee of $99 enjoys a series of privileges. Besides enjoying 2 days' free arrival, it can enjoy movies, TV and music on Amazon platform.

There are about 60 million Prime members in the United States, and Prime membership services have been extended to 11 countries.

The business growth of Prime membership mode to Amazon is obvious. Research shows that the amount of Prime members buying on Amazon platform is about two times that of non members.

Amazon's PrimeDay global shopping day launched by Prime members has been a great success again this year after its first launch last year. Sales in the US region increased by 50% over last year's Shopping Festival, and even increased by nearly 20% compared to the traditional Cyber Monday (Thanksgiving Day online shopping festival).

Among them, Amazon's "heavy users" (who spend more than 4 times shopping on Amazon each month) contribute 56% of PrimeDay sales.

In addition to the third party content, Amazon has created many well made films and TV productions with good reputation through Amazon studios, including 16 Emmy nominated "high tower heroes" and "Mozart in the jungle".

In addition, Amazon's home intelligent terminal Alexa now has 1900 third party developers for its function development, including online travel website Kayak, car service Lyft and so on.

Through the shopping and entertainment services provided by Prime members and the future voice based intelligent assistant Alexa, Amazon's eco circle is trying to penetrate into more and more aspects of people's daily life.