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Amazon sales soar in 2012

Kathleen Hall

Amazon sales rose 27% to $61bn (£39bn) in its 2012 results and 22% in its 2012 fourth quarter revenues to $21.27bn, compared with 2011.

The company does not include a breakdown of its Amazon Web Services (AWS) division, which includes its cloud hosting business. But in a conference call it said AWS mostly accounted for the "other" category in its financial results, which grew 61% to $820m in the last three quarters of 2012 and 59% for the full year, to $2.5bn.

“In terms of the AWS business it’s been growing fast, we’ve increased a number of services dramatically over a number of years,” said Amazon CFO Tom Szutak on the conference call.

AWS launched 159 new services and features in 2012, twice the number of services and features launched it launched in 2011. The SAP Business Suite is also now certified to run on the AWS cloud platform, Amazon said.

Lisa Byfield-Green, analyst at Planet Retail, said the company’s AWS division was still relatively small, but if it continued to grow at a large pace Amazon may provide some specific details in its results.

But Amazon’s growth has slowed from recent years, which saw its sales increase around 40% year-on-year, she said.  This year also saw international sales lag slightly behind North America, compared to last year which saw parallel growth in both markets.

“North America has outperformed international market. Perhaps in Europe we are starting to see a slow-down, which is interesting because in the UK recent multichannel retailers like Next and John Lewis reported significant growth over the Christmas period.”

“They have the opportunity to leverage stores, which Amazon still doesn’t have,” she said.

Byfield-Green added that Amazon’s tax avoidance scandal before Christmas may have also affected sales, but said it was hard to prove in the company’s results as it doesn’t break down trading for the UK market. “Anecdotal evidence suggests people may have chosen to shop elsewhere because of the news,” she added.

Morgan Stanley analysts estimate Amazon will take almost a quarter of the $1tn global online shopping market in 2016.

“We’re now seeing the transition we’ve been expecting,” said Jeff Bezos, Amazon CEO. “After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. 

"In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. 

"We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”


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