Amazon rises after profits jump to pressure on competition. The world's largest online retailer announces a more ambitious transportation destination. In this way, the users of the Prime Minister's offer should in future receive the ordered goods within one day. PR plot or a real goal? Answers from the editor of the SRF, Maren Peters.
Economic editor SRF
Maren Peters is a member of the business editorial team of Radio SRF. Its areas of specialization are international finance and trade organizations, as well as multinational companies.
SRF News: Is there a serious project behind the announcement?
Maren Peters: Enough. Amazon estimates it already delivers a quarter of all orders over a day. Normal delivery is within two days for most products. In the future this should be possible for initial customers by default within one day. Since when should it be so far away and how many products to apply, Amazon is currently fully open.
For many customers, delivery within one day will be a very tempting request and will encourage them to order even more easily over the Internet.
Of course, the announcement is publicity: not only attracts the interest of the clients, but also inspires the imagination of investors. It worked again. The price of the shares of the American company grew by two percent after the announcement.
How surprising this announcement?
The fact that the group aims to deliver orders within a day is new and surprising. Not surprisingly, such a huge global company wants to expand its offerings.
How can Amazon even fulfill the new promise of delivery? The United States itself is huge.
With great investments, especially in logistics, it is necessary for fast delivery of goods in large countries such as the United States or Germany. Amazon plans to invest $ 800 million in the second quarter, originally primarily in North America. This is still the most important market for Amazon. Further details are not yet known.
This will clearly increase pressure on other retail businesses.
Actually. For many customers, delivery within one day will be a very tempting request and will encourage them to order even more easily over the Internet. The group already has a dominant market position. In Germany, for example, nearly half of online sales are made by Amazon.
This, of course, increases the pressure on the whole chain: suppliers, packers and those who deliver products.
If stationary competition does not want to fall further, it has no choice but to join and invest a lot. This can already be noted by previous announcements. When Amazon announced it would switch to a two-day delivery, rivals such as US department stores Walmart and Target also added.
Will this shipping destination change online trading?
If it accelerates. This, of course, increases the pressure on the whole chain: suppliers, packers and those who deliver products.
Amazon has more than doubled its profits in the first quarter of 2019 compared to the same period last year. What is a driver for growth?
The biggest growth is still coming from online trading, which Amazon has also begun. But the cloud services of the group – so storage space in the network – a boom. This is a relatively new business, but very promising.
The conversation was led by Salvador Atassay.