Amazon bets on delivery in 24 hours despite costs

Amazon’s investment in providing 24-hour delivery to its North American subscribers is expensive for the e-commerce giant, whose second-quarter financial results disappointed.
T he group earned a net profit of $ 2.6 billion for the period from April to June, just over $ 2.5 billion a year ago and below market expectations. he announced Thursday.

“One-day delivery is now available to Prime subscribers on more than ten million products, and this is just the beginning,” said Jeff Bezos, Amazon’s founding boss, in a statement. .

But the investments needed to deliver this fast delivery have cost Amazon a reduction in its margin, according to Charlie O’Shea, an analyst at Moody’s.

He noted, however, that it was “a short-term cost that will pay off in the long run, and strategically needed to provide a competitive advantage to consumers over hard-core distribution.”

Amazon earnings per share came in at $ 5.22, well below analysts’ expectations. The stock lost more than 2% in electronic trading after the closing of the New York Stock Exchange.

Despite the market’s disappointment, analysts welcomed Jeff Bezos’ decision to invest in ultra-fast delivery.

“Traditional superstores like Walmart and Target have accelerated their online sales efforts and they have the advantage of being able to offer in-store delivery for consumers who want to get their purchases back quickly,” said Neil Saunders. Director of GlobalData Retail.

According to him, “Amazon does not really have this possibility, so he had to replicate by offering faster delivery for free.”

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