Amazon: The World’s Most Powerful Economic and Cultural Force

Amazon Annual Revenue Copied

Amazon’s increasing popularity among consumers worldwide guarantees that it will continue earning profits. Amazon forecasts its annual revenue growth rate this year will be 12.73% and expects its revenue to reach $485,902,000,000 in 2022.  

These figures are achievable partly because Amazon strongly emphasizes scientific innovations, investing generous amounts of money in scientific research. In 2019, Amazon put a whopping $35.93 billion into technology and content, 12.8% of its net sales. Amazon’s research mainly focuses on advanced technologies such as AI, machine learning, cloud computing, cashless Go stores, robotic warehouses, drone deliveries, and cyber security. There is little doubt that, given this dedicated investment in technology, Amazon’s services will continue improving, and its popularity will increase together with its profits. The table below shows the inexorable upward trajectory of Amazon’s annual revenue since 2009:

Amazon Annual Revenue (Billions of US$)

The figures in the table show that Amazon’s revenue for the second quarter was $121,234 billion, constituting an increase of 7.21% year-over-year. Amazon’s revenue for the twelve months ending June 30, 2022, was $485,902 billion, which is a 9.61% growth year-over-year. Amazon’s annual revenue for 2021 was $469,822 billion, constituting a 21.7% increase from 2020. The largest jump in Amazon’s revenue happened in the first year of the pandemic when people were locked down at home and could only shop online. In 2020, Amazon’s annual revenue was $386,064 billion, a 37.62% growth from 2019.

Sources: Statista, CNBC 

Amazon Annual Revenue by Segment from 2018 to 2022

Amazon excels at diversifying its revenue streams to increase its profits. Indeed, the company’s success partly comes from its ability to use its various business divisions to support and drive growth for other divisions. Far from focusing narrowly and exclusively on retail e-commerce, Amazon has also established an enviable reputation in such areas as cloud computing, online advertising, and digital payments.

The tables below shed light on how each division drives Amazon’s business, individually and collectively. The figures for the current 2022 year are based on the analysts’ estimations from Insider Intelligence. They foresee that Amazon’s global retail e-commerce sales will reach $729.76 billion in 2022, constituting an 18.8% increase year-over-year. Their other prediction is that the US will make up $445.31 billion of that share, accounting for 41.8% of the total American e-commerce sales.

In the fourth quarter, Amazon’s sales decreased as online store revenue sank 2% to $64.5 billion from $66 billion in Q4 2021. For the full year, the e-commerce titan incurred a net loss of $2.7 billion. It has been dealing with slowing sales as, worried about climbing gas and food prices, people began to spend less on discretionary goods. The e-commerce upswing that started during the pandemic has also dwindled because consumers returned to shopping in brick-and-mortar stores.

Amazon Retail E-Commerce Sales Worldwide (Billions of US$)

Source: Statista

Amazon Web Services Revenue (Billions of US$)

Amazon’s web services are the largest cloud infrastructure in the world. They are offered in 26 regions globally and have more than 200 services, ranging from core computing and storage to AI tools and low-code or no-code solutions for products and app developers. The contribution of AWS to the company’s overall revenue has consistently increased. In 2021, AWS revenue reached $62 billion, representing 13.26% of Amazon’s total revenue.

In the fourth quarter, AWS generated $21.38 billion in sales and fell short of analysts’ expectations of $21.87 billion. This is a 20% increase from a year earlier. Although the cloud-computing division showed growth, it demonstrated the slowest growth rate since Amazon started to report its figures separately from other segments. The company expects the growth of AWS to slow further in the coming year.

For the fiscal year 2022, AWS revenue soared 29% year-over-year to $80.1 billion. Still, these figures are lower than the 37% growth seen in 2021. AWS’s operating income was $5.2 billion in the fourth quarter of 2022, dropping from $5.3 billion in the fourth quarter of 2021. AWS’s operating income for the whole of 2022 is estimated at $22.8 billion.

Source: Statista

Advertising Services Revenue from Q3 2020 to Q4 2022 (Billions of US$)

As the growing revenues generated by Amazon’s advertising services clearly show, Amazon might catch up with, and even outperform, Google and Facebook which are presently leading in the digital advertisement space. Indeed, at the end of the first quarter of 2022, Amazon’s advertising revenue jumped 25% to $7.8 billion. Google’s advertisement revenue advanced 22.5% at the end of March 2022, while Facebook celebrated an increase of only 5% over the first quarter of 2021. These numbers suggest that Amazon has a strong long-term potential and is becoming the force to be reckoned with in the digital ad wars.

Advertising revenue in the fourth quarter of 2022 reached $11.56 billion, exceeding analysts’ forecast of $11.38 billion. As its advertising revenue climbed 19% from a year earlier, Amazon again left behind online ad companies Google, Facebook, and Snap. The company thus retains its leading place in digital advertising because it gives sellers more means to pay to promote their goods across the company’s website, apps, and other media channels.

Amazon Prime Services Revenue (Billions of US$)

Although the revenue generated by Amazon Prime services is inseparable from Amazon’s overall revenue, the company provides the net sales numbers related to it, including digital videos, audiobooks, digital music, e-books, and other subscriptions, save AWS. 

Sources: Statista