Amazon finds mixed results overseas (AMZN)

Daniel Keyes
domestic vs international prime subs

BI Intelligence


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Amazon has been trying to replicate its domestic success overseas, but has found mixed results in various markets.

This trend appears to be continuing, as Amazon Business, its business-to-business (B2B) division, signed up 90,000 businesses in the UK in a matter of months, Internet Retailing reports, while Amazon's launch in Australia received a tepid response, according to CNBC.

Amazon’s International segment brought in only 36% of its non-Amazon Web Services (AWS) net sales in Q3 2017, and continues to be unprofitable, so all of these initiatives are important for the e-tailer.

  • Amazon Business is thriving in the UK, signing up 90,000 businesses after only eight months in the market. Amazon is on its way to capturing a sizeable portion of Britain’s B2B e-commerce market, which is estimated to be worth £100 billion ($134.41 billion). The company is launching new services — like one-day delivery and pay by invoice — to make it even more attractive to businesses as it looks to grow further.
  • The e-commerce titan launched in Australia on Tuesday, but has not made a great first impression. The company has set up a warehouse in Australia that enables it to make quick deliveries to Australian consumers, who previously had to wait longer and pay more for shipping through offshore orders. Amazon hopes to capture a significant portion of Australia’s A$32.56 billion ($24.78 billion) e-commerce market. However, it didn't make a strong first step, as its prices, while competitive, don't seem to have impressed Australians. Some products, like the iPhone 7 Plus, are even being sold for less by competitors. Although Amazon is still in its infancy in Australia, and plans to launch Prime in the country in mid-2018, the Australian market clearly won't be a slam dunk for the e-tailer.

Amazon saw international sales rise in Q3 2017, but it continues to lose money overseas. The jump in international sales suggests that Amazon’s investments are boosting its performance, but it needs an even bigger jump in order to offset its high costs. Identifying opportunities like Amazon Business in the UK is important, but the company must find ways to succeed in markets like Australia to draw in Prime subscribers if it wants to get over the hump.

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