A significant drop in online sales, along with rising costs, have seen the first three months of this year become ecommerce giant Amazon’s first quarter since 2015 in which it marked a loss.
Online sales at the behemoth dropped by three per cent in Q1 as pandemic trends towards online shopping began to ebb.
This saw it report a net loss of $3.8 billion (€3.6 billion) in Q1 compared with a net income of $8.1 billion (€7.7 billion) in the first quarter of 2021.
Growth in Amazon’s other offerings, including cloud computing (via Amazon Web Services) and advertising, remained strong.
In a statement accompanying the report, Amazon CEO Andy Jassy shared that Amazon Web Services has grown 34 per cent annually over the last two years.
Its consumer business grew by 23 per cent annually over the past two years, with an “extraordinary” growth of 39 per cent year over year in 2020, requiring it to build double the size of its fulfilment network – and doing so in only 24 months.
“Today,” Mr Jassy wrote, “as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.”
He also addressed the Ukraine war, saying: “The pandemic and subsequent war in Ukraine have brought unusual growth and challenges.”
The disappointing result for Amazon comes as some of the firms that thrived during the pandemic are being hit by increased input costs, higher labour costs, and supply chain issues, along with fading COVID-related consumer habits.
Earlier this month the shares of streaming giant Netflix went into free-fall when it reported its first quarterly subscriber loss in over a decade.
Meanwhile, Apple has warned that sales could be hit by up to $8 billion (€7.6 billion) due to disruptions from the ongoing COVID lockdowns in China.
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