Amazon Q2 2020 Takeaways
Amazon released its Q2 2020 earnings.
I usually follow these announcements to stay on top of trends and takeaways. A few tidbits:
Amazon Web Services (AWS) is not on a $43.B run rate now despite slowing in the quarter. For you Amazon vs Shopify watchers, that is 27x Shopify revenue - on its own. So yeah, that Amazon vs Shopify narrative is overplayed. But again, it works to Shopify's benefit for the comparison, and Amazon's benefit from an antitrust point of view. Symbiotic narrative ironically, and great for the media. Whether or not it’s a realistic comparison, it gets clicks.
Added 175k employees in March/April over 1M total employees now globally (FT + temp).
Prime Day in Q4 except in India (August 2020) - but we kind of knew that.
Grocery tripled year on year on a quarterly basis. That is a phenomenal trend for them in a difficult sector. Will be interesting to see if that continues.
Marketing spend down 33% in Q2 mostly to try and kneecap demand - you saw that with affiliate changes and elsewhere.
Growth is being largely driven by Prime - both basket size and purchase frequencies are up.
Matthew Holman chimed in with some thoughts about AWS, saying “I think some of the antitrust talk will grow as AWS continues to fund Amazon’s marketplace and fulfillment dominance. What other company can operate at a total loss to gain market share, all thanks to the most profitable business on the planet? (That’s AWS.)” It’s a good point, Amazon’s business really is like no other, but some of what distinguishes them - and what we don’t often talk about - is how much of that is made possible by AWS.
That said, in a year unlike any other years, Amazon’s core services have proven essential for millions of people. It will be very interesting to see how different sectors - like grocery in particular - grow or change in the coming quarters.
