What is happening to the big e-tailers? After the recent profit warnings of Asos and Zalando, the two biggest sharks in the pond, Alibaba and Amazon, have just put out discouraging figures. Both companies, which operate big marketplaces for sporting goods and many other products in their respective territories, have reported higher-than-expected profits, but their sales were below forecast, for various reasons.
Amazon's sales grew by 20 percent to $72.4 billion in the fourth quarter ended on Dec. 31, with growth of 21 percent in local currencies, and the group's net income jumped by 63 percent to $3.0 billion. However, the company's share price dipped by more 5 percent due to a mitigated forecast for the first quarter because of losses at its business in India, following the introduction of stricter regulations on the local content of products sold over the internet.
The company is expecting a sales increase of between 10 and 18 percent for the first quarter of this year, with an unfavorable impact of 2.1 percentage points from foreign currency translations. It is also projecting an operating profit of between $2.3 billion and $3.3 billion for the quarter, compared with $1.9 billion in the same period a year ago.
For the full 2018 financial year, Amazon booked a strong increase in net income to $10.1 billion from $3.0 billion in the prior year on 31 percent higher sales of $232.9 billion. On a currency-neutral basis, they went up by 31 percent.
Much of the growth has come from new services like Amazon's new cloud computing business, which enjoyed a 45 percent jump in revenues.
Meanwhile, Amazon is moving strongly into omni-channel operations. It launched physical pop-up stores in six European countries during the latest holiday season, presenting for the first time a curated selection of more than 2,000 products. It carried out 136 events and workshops for customers in Amsterdam, London, Madrid, Milan and Paris.