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Amazon's Trail-Blazing Growth Continues

Amazon broke the $100 billion sales barrier in 2015 and is continuing to show unrelenting growth into 2016, with Q1 revenue up 28% to $29.1 billion. In addition to organic expansion of its e-Commerce business through wider product range and geographical reach, services are growing at 60% and now account for over 25% of revenue. 40% of 2015 operating profits came from Amazon Web Services (AWS) which is growing at 64% and is likely to hit $12 billion revenue in 2016.

Amazon's Media segment grew at just 3.5% CAGR until 2015, but still represents a mighty business, with sales of $23 billion, bigger than Apple. Book publishing remains core, driven by Amazon's 60% share of the e-book market, served by tablets and its own Kindle e-readers. To offset decline in packaged music and video, the company offers free streaming entertainment in 5 of Amazon's key markets to subscribers of Prime, its highly successful customer loyalty program, which now has over 40 million members.

In consumer electronics, Amazon continues to spin out a succession of innovative products developed by Lab126, its R&D group based in Cupertino. These include Echo, a wireless speaker with Amazon's Alexa voice control which was the surprise hit of 2015, selling at least 2 million units, according to Futuresource estimates. Amazon also continues to roll out dedicated Kindle e-readers despite the huge growth of tablets, including new models which will be solar powered.

In a recent Perspective report 'Amazon: a Global e-Commerce Powerhouse', Futuresource gets inside the success factors which have driven the company from an online bookseller in 1994 to the world's most valuable retailer today.

 

About the author

John Bird

About Us

Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.