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Pursuit of growth hits Amazon’s profits

04 August 2017 - 09:30 by Mike Price

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Although Amazon managed to generate £29.05 billion from sales made via safe shopping online over the past three months, its profits took a hit and fell by 77 per cent as a result of its aggressive investments being made around the world.

Retail Week reports that the US e-commerce giant is sticking to its long-standing tactic of spending vast amounts of cash as it seeks to penetrate new marketplaces, especially in countries where it has yet to secure a sizeable foothold. India is in its sights at the moment, but it is also splashing out on new opportunities in the world of entertainment, as it seeks to trump Netflix with its streaming offerings.

For British customers, the money they spend via safe shopping online is being plumbed back into other endeavours by the firm, with the recent announcement of the wider rollout for Amazon Fresh being just one example of this trend. It has even introduced its own fashion line, bringing more products under its expansive brand umbrella.

Other signs of its investment activities can be seen in the distribution centres which are popping up nationwide, with many new jobs being created as a result. So while investors may not like the way that profits are tanking, the benefits of its success are being felt in other ways.

Following Amazon’s acquisition of bricks and mortar chain Whole Foods this year, its arrival as a contender on the high street seems inevitable. The threat faced by traditional retailers is significant, albeit one which very few firms are ignoring.

Chief exec, Jeff Bezos, reaffirmed his company’s commitment to providing services which put the customer first. And as the world’s richest person, he can certainly afford to push through his investment ideals via the organisation he controls.