This is where Amazon’s Revenues come from

Amazon, the US e-commerce giant has transformed the way we shop. In 2023, Amazon had 310 million active users and global revenues of US$574.78 Billion.

But where exactly does all that revenue come from? Let’s take a quick dive into Amazon’s revenue streams across different geographic regions.

The US Reigns Supreme

Unsurprisingly, the United States, Amazon’s birthplace, remains its biggest revenue generator. The US market accounts for a whopping 45% of Amazon’s total market share. In 2023 alone, Amazon accounted for 80% of online marketplace sales, 40% of e-commerce sales, and 4% of retail sales in the US, according to research company eMarketer. The company further forecasted that in 2024, Amazon will grow its US retail e-commerce sales by 11.5% to reach $492.23 billion, a staggering increase from the 2020 figures of $263.52 billion. This dominance can be attributed to factors like having a large, established customer base and a well-developed logistics network among other factors. Further, Amazon Web Services is increasingly accounting for a large chunk of the company’s revenues, with sales in 2023 amounting to some US$90 billion, although it’s unclear how much of that is attributed to US sales. Similarly, Amazon’s ad sales reached US$46.9 Billion, in 2023, which represents a significant increase from 2021 figures.

Beyond the US: A Global Marketplace

While the US market is king, Amazon’s reach extends far beyond its borders. Here’s a glimpse into some of its key international markets:

• Japan: The land of the rising sun is a significant contributor to Amazon’s revenues, bringing in 5.3% of Amazon’s global revenue in 2020. Although facing competition from local giants like Rakuten, Amazon’s growth potential in Japan is undeniable. The company is actively investing in expanding its distribution network to cater to the growing demand, and in January said it will invest US$15.24 Billion by 2027 to expand it’s cloud services in the country.
• United Kingdom: Another major market, the UK contributes a healthy 5.8 % to Amazon’s international revenue (2023 figures). Interestingly, the UK market recently boasted an impressive annual growth rate of approximately 51.2% (2020 figures). This rapid growth highlights the increasing adoption of e-commerce within the region, but also has a COVID-19 element, as well as being indicative of the uptake of AWS by corporate customers across the UK.
• Germany: The German market has also witnessed significant growth, with revenue rising from US$22.23 billion in 2019 to US$37.6 Billion in 2023, a 27% increase from 2020 figures. The 2023 figures translates to a 6.5% share of Amazon’s total revenue. As was the case with the UK market, the COVID-19 pandemic most likely further fueled this growth, especially between the years 2019 and 2021.

The Rest of the World: A Sleeping Giant

Beyond these major players lies a vast and diverse market – the “rest of the world” which although small in comparison, presents a large opportunity. This category encompasses countries like Turkey, Australia, Mexico, India and Brazil. Although soon, countries like Chile, Colombia, South Africa, Nigeria, Kenya and Tanzania are due to be added to that list, if they haven’t already. Last month (May), Amazon launched in South Africa, and despite a pause in expansion in 2023, it is anticipated that the Tech giant will expand into the countries soon.

While individual country figures aren’t readily available, Amazon’s 2022 annual report reveals a staggering $69.8 billion in sales from this ‘rest of the world’ segment. This indicates immense potential for further growth in these emerging markets.

The US undoubtedly remains the cornerstone of Amazon’s revenue generation. However, the success story extends far beyond its borders. Countries like Japan, the UK, and Germany are playing increasingly crucial roles, and with the growth of the BRICS countries, it is almost certain that we haven’t yet seen the peak of Amazon’s global dominance.

This growth means opportunities for sellers across Africa are just around the corner. But it also spells tough competition for incumbents who are trying to grow local e-commerce platforms.

It’s important to remember that these competitors are companies who are are vying to grab a part of the market share of Amazon in various industries, but they are much smaller in comparison, and do not have the presence and technology infrastructure that Amazon currently has. Still, those competitors also present opportunities for traders and sellers across Africa. Nevertheless, as e-commerce continues to flourish globally, we can expect Amazon’s revenue streams to diversify and expand even further. That growth and expansion, should be closely watched.

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Apple to Partner with OpenAI to Bring ChatGPT to iPhones

Apple is close to making a deal with OpenAI, the company that created ChatGPT. This deal would allow Apple to use OpenAI’s artificial intelligence technology on the iPhone. The news comes just weeks before Apple plans to release its major iOS 18 software update for iPhones.

Apple was already known to be talking to both Google and OpenAI about adding chatbot features to iOS 18 powered by their AI systems. However, this new report suggests Apple is close to striking a deal with the ChatGPT maker OpenAI.

If Apple does partner with OpenAI, what might that mean for the privacy, security and capabilities of your iPhone?

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