Amazon’s Q2 results were announced on Thursday 01 August: Despite a slower growth rate, Amazon continues to beat the broader retail market writes Colin Lewis.
Amazon’s overall volume growth of 8.7% in the U.S. outpaced the retail market’s 2.6% growth, showcasing its continued market dominance.
Here are some stats from the Q2 results:
- Amazon’s gross merchandise volume (GMV) grew by 8% year-over-year, fastest growing categories were Beauty & Personal Care and Home & Kitchen, while slower categories included Books and Video Games.
- Amazon’s international volumes outpaced North America, driven by growth in existing markets and increased Prime membership penetration.
- Amazon’s profitability is up significantly, with operating margins increasing by 230 basis points compared to 2Q23.
From a Retail Media perspective, Amazon’s advertising sector saw a robust 20% year-over-year increase in Q2, reaching $12.8 billion for the quarter.
The primary driver of this growth is Sponsored Products, which dominate marketers’ budgets on Amazon and continue to yield positive returns. Amazon exceeded the broader digital advertising market by 2.8%.
Advertisers allocated 6.8% of their total turnover to Amazon Advertising during the quarter, an increase on last year. As Amazon continues to gain retail market share, advertisers are simply just spending more. As a results, both competition and cost is increasing.
Despite digital advertising competitors growing faster than Amazon, the market expectation is to deliver $56B+ in advertising revenue this year, up 21% from 2023.
For comparison, in 2022, Amazon’s advertising revenue reached $37.8 billion. This marked a growth of 21% compared to the previous year, although it was a slower growth rate than the 45% experienced in 2021.
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