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▶ Video account attention cross-border navigation In July last year, Andy Jassy took over as CEO of Amazon from Bezos. Faced with the challenges of a sluggish market, ongoing labor-management struggles, increasing regulatory pressure and the outflow of top talent, he realized the sequelae of Amazon's blind expansion and took a series of measures to "slim down" Amazon after taking office. Recently, judging from the second quarter 2022 financial report released by Amazon, the "slimming action" seems to have achieved some results. Amazon's Q2 net loss was 2 billion, but its revenue exceeded market expectations! It is learned that on July 28, local time, Amazon released its second quarter financial report for 2022. Amazon's Q2 revenue was US $ 121.234 billion , a year-on-year increase of 7% , slightly lower than the 7.3% in the first quarter, the slowest growth rate for Amazon in nearly 20 years, but higher than the market expectation of US$119.09 billion. Amazon's net loss in the second quarter reached $ 2.028 billion , continuing the losses in the first quarter. Amazon attributed this to the failure of its investment in Rivian, an American electric vehicle company. It is reported that after Rivian's stock price plummeted 49% in the second quarter, Amazon's investment in Rivian lost $ 3.9 billion . As of now, Amazon's total investment loss in Rivian has reached $ 11.5 billion . According to the report, Amazon said that the challenges faced in this quarter's performance were mainly due to the following factors: 1. With the advent of the post-epidemic era, the e-commerce online shopping boom brought about by the early stage of the epidemic is fading ; 2. The repeated outbreaks of the epidemic and the unstable global political and economic situation have caused persistent global supply chain problems ; 3. Under high inflationary pressure , fuel and energy costs continue to rise, and spending on non-essential consumer goods slows down; 4. Overexpansion driven by the pandemic has left Amazon with too many employees and excess warehouse capacity. However, Andy Jassy also said in the report: "While inflationary pressures on fuel, energy and transportation costs persist, we have made progress on the controllable costs we mentioned last quarter, particularly improving the productivity of our delivery network." As the growth of online revenue slows down, Amazon is carrying out a "slimming" campaign to reduce costs and increase efficiency in order to effectively control costs. Amazon laid off nearly 100,000 employees, reducing scale and shifting costs! It is learned that as of the end of the second quarter, Amazon's direct employees have decreased by 99,000 , and the current number of employees is 1.52 million. Amazon Chief Financial Officer Olsavsky said that due to slowing growth and overstaffing in warehouses, Amazon has implemented layoffs in its distribution and warehouse networks. In view of inflation and macroeconomic uncertainty, Amazon is considering slowing down recruitment. It is also learned that since 2022, in addition to large-scale layoffs, Amazon has also frequently updated a number of policies: 1. Reduce excess facilities and sublease excess warehouses - All of Amazon’s non-grocery stores are closed , including 68 bookstores, Amazon 4-star stores, and pop-up stores;
- Cancel warehouse expansion plans , sublease at least 10 million square feet of warehouse space and delay construction of new facilities.
2. Transfer inflation pressure and reduce operating costs - For sellers: FBA fees will increase across the board, with additional fuel and inflation surcharges on US and European sites;
- For buyers: Fees for Prime, its delivery and streaming service, are rising by up to 43% a year in Europe.
Judging from Amazon’s second-quarter financial report, the effects of this series of cost-cutting and efficiency-enhancing measures have already become apparent. Looking ahead to the third quarter, Amazon expects revenue of $ 125 billion to $130 billion , an increase of 13% to 17% compared to the third quarter of 2021, which may be higher than the market expectation of $126.4 billion. It also estimates that net profit in the third quarter will be between $0 and $ 3.5 billion . Given the macro pressures Amazon is currently facing, it remains a difficult task for Amazon to increase the growth momentum of its core retail business to a level that investors are satisfied with. But overall, this quarter's financial report shows that things are moving in a good direction. In addition, Amazon executives responded to investors' questions and the following two points are also worthy of sellers' attention: - Regarding investment direction: Amazon said it estimates that about 40% of its funds this year will be used to increase storage capacity and improve transportation efficiency.
- About "Buy with Prime": Currently, this service is only available to sellers who have opened FBA (Amazon FBA warehousing and logistics). Amazon plans to gradually invite more sellers to participate this year.
In response to questions, Amazon said that the growth of third-party sellers remains very strong and is an integral part of its business. It can be seen that there is still room for growth in the cross-border e-commerce industry for cross-border sellers. When the tide of traffic dividends recedes, sellers swimming naked gradually appear on the shore. Amid the exclamations of falling profits and continuous losses, only those sellers who can understand the market environment according to their own circumstances, adjust their strategies and persevere, will be able to weave their own clothes of victory. What do you think about this? Welcome to discuss in the comment area~ |
