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Amazon Inc’s (NASDAQ: AMZN) disappointing results came as surprise for investors on Wall Street on Thursday.
While have product sales been flatlined, and revenue at its main online-shopping business segment has stagnated for six months, the company has said that the overall sales might slow down furthermore.
The biggest hit to the company was its e-commerce business which reported an operating loss of $1.57 billion in North America and $1.28 billion internationally.
Amazon has managed to gain a stronghold in the market as U.S. e-commerce grew rapidly. The online retail business got a huge boost during the earlier days of the pandemic, but its market share grew by just 0.2% in 2021 and so far in 2022, the slowest rate in years, reported Wall Street Journal.
CFO Brian Olsavsky on Thursday said the company hasn’t seen any indicators of weakened consumer demand. He said that the first-quarter revenue was up by a double-digit percentage from the first quarter of 2020. He also said the company has had more capacity in its warehouses than it does demand.
Causes for worry
Rising inflation and its impact on online shoppers is also a cause for worry for the e-commerce giant.
In addition to this, rising competition from Walmart, Canadian rival Shopify Inc., and others has increased. Despite that Amazon has held on to its old customers through its Prime memberships, which have become the company’s connector to other businesses.
The slowdown in online spending is real. While in-store sales rose, March is the first month to show a decline in online sales since the pandemic began.
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Source: Amazon and Wall Street Journal