Amazon sales soar as profits fall in expansion push
Amazon.com on Thursday reported a jump in retail sales along with a profit slump, as its fast, costly expansion into new categories and countries continues unabated.
The world's largest online retailer posted second-quarter revenue of US$38 billion (S$51.6b), up 25 per cent from a year earlier. This breakneck growth stands in contrast to many brick-and-mortar rivals, who have struggled as more people shop online.
Yet, Seattle-based Amazon posted a 77 per cent drop in quarterly income, and even said it could lose up to US$400 million in operating profit during the current quarter, signalling Amazon's heavy investment to maintain its dominance.
Investing in faster shipping and video has become a refrain for the company. While some expected Amazon's spending in these areas - stepped up since last year - to ease, the company is plowing ahead to reinforce its fast-shipping club Prime.
Shares of Amazon had touched a record high of US$1,083.31 earlier on Thursday, helping CEO Jeff Bezos briefly unseat fellow tech billionaire Bill Gates to become the world's richest person, according to Forbes.
Amazon also announced its two-hour delivery service Prime Now in Singapore on Wednesday, part of its ongoing investment to be a major retail player in Asia. Amazon has committed to investing US$5 billion in India and earlier this year said it would take on commerce in the Middle East by acquiring Dubai-based Souq.com. - REUTERS