Amazon’s financial report was released, with a loss of 3.8 billion US dollars in the first quarter!

As a giant in the cross-border e-commerce industry, Amazon's every move affects the hearts of thousands of sellers. Recently, Amazon announced its first quarter financial report for fiscal year 2022, but the performance of the report disappointed many investors , with a net loss of up to US$3.8 billion, the first loss since 2015.

Since 2020, Amazon's drastic rectification policies have made many sellers feel that it is "difficult to do business" on Amazon. Sellers have begun to take the path of multi-platform layout, and some of them have turned to Walmart. According to Walmart's annual report data, its e-commerce sales in 2021 reached US$43 billion, accounting for 11.6% of total sales.

Amazon's financial report shows a net loss of $3.8 billion

Data showed that the e-commerce giant's net sales increased by 7% to US$116.4 billion in the first quarter, with the growth rate slowing slightly; while its net loss in the first quarter was US$3.8 billion , the first loss since 2015.

Slowing sales, rising costs and Amazon's stake in electric car company Rivian were the main reasons for the loss in the first quarter, especially its investment in Rivian. It is reported that Amazon owns nearly 20% of Rivian's shares, and in the first quarter, the company's stock price fell by more than 50%, causing Amazon to lose about $7.6 billion.

Prior to this, Amazon attributed the slowdown in sales growth to macroeconomic conditions and the impact of the Russia-Ukraine war. In a statement, Amazon CEO Andy Jassy said that the COVID-19 pandemic and the Russia-Ukraine war have brought unusual growth and challenges to Amazon, and that in order to ensure that Amazon's staffing and warehousing capacity are at normal levels, its costs in the fulfillment network have increased.

Amazon has been dealing with multiple economic challenges, including inflation, rising fuel and labor costs, global supply chain disruptions, and the ongoing COVID-19 pandemic. In order to ease these rising cost pressures, Amazon is introducing a series of policies to pass on operating costs.

Earlier, Amazon announced that it would impose a 5% fuel and inflation surcharge on FBA sellers in the US starting on April 28, the first time in Amazon's history that such fees were collected; Amazon then announced that it would impose a 4.3% fuel and inflation surcharge on FBA sellers in Europe starting on May 12. In addition, Amazon also raised the price of Prime membership in the US from $119 to $139 last quarter.

Despite a series of measures to pass on costs, Amazon's first-quarter profits were still lower than expected. From the financial report data, we can see that Amazon's operating profit margin has dropped from 8.2% in the same period last year to 3.2%.

It is worth noting that Amazon's cloud computing business is still booming. In the first quarter, Amazon's cloud computing business revenue was US$18.3 billion, a year-on-year increase of 37% . The cloud computing business has become Amazon's main source of profit, generating much higher profits than the e-commerce business. Amazon said that the growth of its cloud computing business was driven by customers in industries such as telecommunications, aerospace, sports, technology and healthcare.

Amazon said that future developments are still subject to great uncertainty and may be affected by many major factors, such as uncertainties in the COVID-19 pandemic, fluctuations in foreign exchange rates, global economic conditions, changes in customer demand and spending, inflation, labor market and global supply chain constraints, and the growth rates of the Internet, online commerce and cloud services.

Talking about the second quarter outlook, Amazon said it expects net sales of $116 billion to $121 billion, an increase of 3% to 7% compared with the second quarter of 2021. Operating income is expected to be between -$1 billion and $3 billion, compared with $7.7 billion in the second quarter of fiscal 2021. It can be seen that Amazon's forecast for its second-quarter revenue is not very optimistic.

Andy Jassy said: "Amid continued inflation and supply chain pressures, it may take some time to return to profitability. But we can see many encouraging progress in customer experience, including delivery speed performance, and our delivery speed is now approaching the highest level in several months."

Amazon's stock fell more than 9% in after-hours trading following the release of its earnings report .

In addition to Amazon, Walmart also recently released its 2021 annual report.

Walmart's net sales in 2021 reached $370 billion

Walmart's net sales in fiscal 2021 totaled $370 billion, up about 8.6 % from $341 billion in fiscal 2020. E-commerce sales accounted for 11.6% of its total sales, reaching $43 billion, up 7.1% from fiscal 2020.

Affected by the epidemic, Walmart incurred $4 billion in COVID-19 -related costs in fiscal 2021. However, it is precisely because of the increase in consumer demand brought about by the epidemic that Walmart's sales in the international market in 2021 showed positive growth, especially the sales growth of Walmart in the United States and Sam's Club was the strongest.

At the same time, Walmart also faces many challenges in 2022. Walmart mentioned in its annual report that consumers' shopping behaviors and preferences may change in 2022, such as more shifts to online purchases. If Walmart fails to respond to these changes in a timely and prompt manner, its financial performance in 2022 may also be affected .

In addition, other risk factors pointed out by Walmart include the ongoing COVID-19 pandemic, uncertainty about the economic impact, potential pressure from competitors' M&A activities, and potential costs related to climate change .

To help drive net sales growth, Walmart said it will increase investment in digital infrastructure, store renovations and other customer programs instead of continuing to open new stores in 2022. At the same time, Walmart also said it would actively adapt to changing consumer needs to better maintain its reputation and relationship with customers .

A Walmart Seller Status Report from Jungle Scout shows that Walmart sellers have a large and loyal customer base, with an average of 1,918 customers per seller . Online business is becoming an important source of revenue for Walmart, and it is expected that 40,000 new sellers will join Walmart 's growing online market this year .

“Walmart’s online business is becoming a significant player in the e-commerce market , providing an attractive option for e-commerce sellers looking to diversify their strategies , ” said Greg Mercer, founder and CEO of Jungle Scout.

These Walmart online market sellers often adopt an omnichannel e-commerce strategy . Jungle Scout's survey report shows that 97% of Walmart sellers sell products on at least one other e-commerce platform, of which Amazon is the most popular platform, followed by eBay, Shopify, Facebook and Etsy. It can be seen that with the increasingly fierce competition in the e-commerce market, the multi-platform layout strategy has become more important.

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