Amazon's international branch suffers operational loss

Amazon's international branch suffers operational loss

Amazon's international branch has suffered a 60 million dollar net loss (43 million euro) in the past quarter because of huge Chinese investments, mostly because Amazon enlarged its Chinese product range to compete with local giant Alibaba.

Still profitable worldwide

Despite the 60 million dollar net loss in its international branch, Amazon still managed to get a 108 million dollar (78 million euro) net profit, outperforming the same period last year, when it managed 82 million dollars (59 million euro). Amazon has not divulged any China-specific numbers, but its local market share is well below that of its Chinese competitors, like Alibaba, despite having an online Chinese presence for over a decade.

 

Amazon's worldwide turnover rose 23 % in the first quarter, to 19.7 billion dollars (14.2 billion euro), outperforming analysts' expectations by 300 million dollars (210 million euro). That goes to show that turnover growth is not slowing down at all, despite a 20 % turnover growth in 2013's fourth quarter, which is low according to Amazon's standards and which troubled investors.

 

Own delivery service

Amazon is also running an American pilot to see if it can manage a delivery's "last mile", which would mean that the final part of the delivery is outsourced to companies under Amazon's supervision. The try-out is partly a response to the huge delays during the past holiday season, when Amazon was quite helpless when plenty of gifts failed to arrive on time for Christmas.

 

The service would also try to limit delivery costs, as they grab an increasingly larger share of turnover and it would also facilitate same-day deliveries. The United Kingdom already has this service, for the same reason, namely courier services being unable to handle the amount of deliveries. The service still has some issues in the UK, with plenty of reports of wrong addresses, wrong packages, tardy deliveries or no deliveries at all.

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