While Amazon experienced a strong 2024, culminating in its “most successful holiday season ever”, the e-commerce giant has committed to invest a hundred billion euros in what it calls “the biggest technology shift and opportunity since the internet”.
Growing retail branch
In the fourth quarter of 2024, Amazon’s turnover increased 10 % to 187.8 billion dollars (174 billion euros). For the full year, turnover even rose 11 % to 638 billion dollars (590 billion euros). Operating profit nearly doubled to 68.6 billion dollars (64 billion euros). As usual, its cloud Amazon Web Services (AWS) was the fastest grower (+ 19 %), but the retail divisions also performed well.
E-commerce delivered 7 % more revenue over the whole year, with 8 % growth in the fourth quarter to 75.6 billion dollars (73 billion euros). Physical stores grew 8 % to 5.6 billion dollars (5 billion euros) in the fourth quarter. Advertising services grew 18 % last year, while revenue from memberships climbed 10 %. Global shipping costs at Amazon increased by 4%, while the total ‘cost of sales’ decreased 10 %.
Faster delivery pays off
CEO Andy Jassy believes that artificial intelligence is the biggest revolution and business opportunity since the internet, so he wants to invest another hundred billion in it before the end of the year. Its AI assistant Rufus already helps consumers with their purchases, and Amazon claims it improves monthly. The use of robots in distribution centres also lowers costs and increases productivity.
Amazon also continues to invest in faster deliveries, as shorter delivery times increase the conversion rate. Jassy emphasised that customers who benefit from fast delivery return more often, especially for daily groceries and pharmaceutical products. Prime members in the United States received 65 % more orders on the same or the next day compared to a year earlier, which contributed to record revenues during Black Friday and Cyber Monday. The end-of-year period was also the best ever, the company states.
However, Amazon expects a slowdown in the first quarter of 2025, mainly due to unfavourable exchange rate effects. Revenue is expected to grow between 5 and 9 %, operating profit is projected to be between 14 and 18 billion dollars (13 and 17 billion euros).
