Amazon shares rise to 60% —more than double compared to last year— at the end of the second quarter. Online retail sales jumped 48%, whereas, revenue from Amazon Web Services recorded for 29% rise. “This was another highly unusual quarter,” said Jeff Bezos.
Today, Amazon reported a 43.4% increase in U.S. sales and 33.5% worldwide revenue growth in the second quarter.
This profit margin is recorded highest for the retail giant in its 26-year of history.
Delivery and video services bundled with the company’s loyalty club Prime are a key reason why customers subscribe to that program and do more of their shopping on Amazon. It holds an edge over rivals like Wal-Mart and Target because all of its sales are online.
As a response to the pandemic, people were inclined towards online shopping. Consequently, Amazon’s highest-grossing products were from the category of grocery, entertainment, and cloud computing operations.
Besides, there was a surge in grocery delivery capacity by 160%, this also increased headcount in its fulfillment network by 34%. Since the COVID-19 pandemic spiked the sales, Amazon has hired about 175,000 employees.
How is Amazon responding to the pandemic crisis?
- Amazon cut back on marketing expenses to curtail surging demand and also spent less on travel and meetings.
- Amazon also tripled the number of Whole Foods Market stores where consumers can pick up groceries.
- It spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand.
- Amazon purchased personal protective equipment, increased cleaning of the facilities, followed new safety process paths, adding new backup family care benefits, and is paying a special thank you bonus of over $500 million to front-line employees and delivery partners.
- Amazon has created over 175,000 new jobs since March and is in the process of bringing 125,000 of these employees into regular, full-time positions.
- Amazon is acting aggressively to help protect customers from bad actors and have removed over one million offers from its stores due to COVID-based price gouging.
- Alexa is helping customers stay informed and connected, and can now answer tens of thousands of questions related to COVID-19.
- AWS is helping healthcare workers, medical researchers, scientists, and public health officials working to understand and fight COVID-19 by providing a centralized repository of curated, up-to-date, pre-processed, and publicly-readable datasets focused on the spread and characteristics of the virus.
