Continuous improvement
in retail business,
Cloud business enters a
recovery cycle
——
Company profile：
Amazon is a global retail and cloud service giant that provides Amazon online and other retail related services, AWS cloud services, and is a leading player in the industry market. Its financial core business is divided into two parts - retail business (online online store, offline physical store, third-party seller service 3P seller service, subscription business, and advertising revenue), and intelligent cloud (AWS). In addition to its traditional retail business, Amazon has continuously invested in research and technological innovation, launching disruptive and influential products and services such as the Kindle, Echo, Alexa, AWS, and continuously improving and optimizing its existing business, providing more convenient and efficient user experiences such as Prime, FBA, Amazon Go, and building a platform that includes e-commerce, cloud computing, digital content, intelligent hardware, artificial intelligence The huge and complex Business ecosystem in many fields, such as the Internet of Things, has gradually increased the proportion of high profit revenue from cloud services, advertising, and merchant platform services. The essence of the company has changed from an e-commerce retail company to a comprehensive technology company focusing on providing online services, realizing diversified revenue sources and profit contributions.
Retail business profit margin gradually restored
——
After experiencing the rapid growth stage of online business during the epidemic, the high operating costs and negative profits brought about by digestion and expansion after the epidemic, and achieving profit growth through large-scale layoffs, reduction of operating costs such as warehousing and logistics, it is expected to continue to increase profit margins to pre epidemic (median) levels in the future.
Pay attention to the subsequent cycle recovery of cloud business and AI cloud product performance
——
The company's cloud business has reached a historical low in year-on-year growth during the weak macro and weak cycle of enterprise capital expenditure. At the same time, AWS, as a leader with over 30% of the global market share, is facing dual pressures of market saturation and intensified competition. However, Amazon's layout in the AI field, including computing power, platforms, and applications, is expected to enhance cloud business competitiveness and commercial value.
AI is expected to further open up new growth opportunities
With the breakthrough of AI technology and Amazon's massive user data traffic, Amazon is expected to improve the quality of related business services and profit margins. For the retail business end, precise marketing, more intelligent customer service, and improved operational efficiency such as storage and logistics can be carried out. For 3P seller services and advertising subscription businesses, efficient marketing and entertainment content generation can be carried out to improve performance efficiency and reduce performance costs.
Advertising and third-party sellers are the focus of future growth.
——
1. The volume of e-commerce advertising business is still relatively small (Amazon's advertising revenue in 23Q1 was 9.5 billion, Meta 28.1 billion, Google 54.5 billion, and Alibaba CRM 8.8 billion); Referring to Alibaba, the advertising placement efficiency ROI of e-commerce platforms is relatively high;
2. The proportion of third-party sales increased to 59%, compared to 55% in the same period last year; Compared to independent websites and other platforms, Amazon has huge traffic, and FBA's high timeliness and service quality can better match the needs of European and American users.
Data source: Company,Broad Inventment Securities forecasts
Risk factors:macro risks, intensified industry competition, and lower than expected business development.
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