Amazon posts operating profit of $345 million; sales see surge of 40%

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Published: August 1, 2020 4:50 AM

Amazon is holding Prime Day sale event in India on August 6 and 7. The event has been pushed to Q4 for all other markets.

Net sales increased 40% to $88.9 billion in Q22020, compared with $63.4 billion in the year- ago quarter, Amazon said.Net sales increased 40% to $88.9 billion in Q2 2020, compared with $63.4 billion in the year- ago quarter, Amazon said.

Amazon’s international business posted operating profits of $345 million in the three months ended June 30 on the back of a pick up in demand. The segment had reported losses of $601 million in Q2 2019. Speaking at the company’s Q2 2020 earnings call, officials said that the focus is on digitising sellers in India, many of whom belong to the micro, small and medium category. Amazon India will work towards on-boarding more sellers in the country and recruiting more people.

On investments on Prime benefits in new countries, chief financial officer Brian Olsavsky said, “What you also see are investments in new countries. Obviously, India is the biggest one, but also, to a lesser extent, the Middle East, Brazil, Turkey and Australia are recent additions. So there’s always an element of expansion going on there. Advertising is growing, so that’s a good source of profitability”.

Amazon is holding Prime Day sale event in India on August 6 and 7. The event has been pushed to Q4 for all other markets.

Net sales increased 40% to $88.9 billion in Q2 2020, compared with $63.4 billion in the year- ago quarter, Amazon said. Operating income increased to $5.8 billion in the April-June quarter against $3.1 billion in Q2 2019.

“As expected, we spent over $4 billion on incremental Covid-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand,” Bezos said in a statement.

Amazon recently announced the addition of 10 new fulfilment centres (FC) in India. The e-commerce major has also ramped up hiring, creating about 70,000 fresh temporary job profiles. Amazon’s investments have enabled nearly 7,00,000 jobs over the last seven years in the country. The pandemic has nudged more consumers to take to online shopping, leading to a surge in demand. Amazon and Walmart-backed Flipkart jointly hold 80% of the domestic e-commerce sector.

In January, founder & CEO Jeff Bezos had announced an incremental investment of $1billion in India, bulk of which will be used to digitise small and medium businesses.

Earlier this month, Amazon said the firm’s Global Selling programme has helped Indian small businesses reach cumulative exports worth over $2 billion.

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