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Voice commerce and marketplace sellers lead as Amazon full-year sales rise by almost a third

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Voice commerce continued to lead the way for Amazon, as it reported net sales up by 21% in its fourth, Christmas, quarter – and up by 31% in the full year.

The Echo Dot, one of Amazon’s own-brand voice commerce devices, was the best-selling item around the world, and the retailer now has doubled its Alexa team.

Meanwhile, the retailer said that small and medium-sized marketplace sellers were responsible for 50% of products sold over the holiday period, and that their sales were now growing faster than its own direct sales.

The US retailer, which is also the UK’s leading pureplay – ranked Elite in IRUK Top500 research –  reported net sales of $72.4bn (£55.4bn) in the quarter to December 31, 21% up on the $60.5bn (£46.3bn) it reported at the same time last year. Net income – or profits – increased to $3bn (£2.3bn) in the fourth quarter, up from $1.9bn (£1.5bn) a year earlier.

Over the full year, net sales were 31% up at $232.9bn (£178.3bn), while net income stood at $10.1m (£7.7bn), up from $3bn (£2.3bn) a year earlier.

But looking ahead, Amazon is forecasting a slowing in growth, with sales expected to be up by 10% and 18% in the first quarter of 2019. However, operating income is expected to be up by between $2.3bn (£1.8bn) and $3.3bn (£2.5bn), from $1.9bn (£1.5bn) in the first quarter of 2018. 

“Alexa was very busy during her holiday season,” said Jeff Bezos, Amazon founder and chief executive. “Echo Dot was the best selling items across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year. The number of research scientists working on Alexa has more than doubled in the past year and the results of the team’s hard work are clear.

“In 2018 we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000 and customers spoke to Alexa tens of billions more times in 2018 compared to 217. We’re energised by and grateful for the response and you can count on us to keep working hard to bring even more invention to customers.”

The retailer added new smart home features for Alexa, with more than 28,000 Alexa compatible smart home devices now available from more than 4,500 brands.  Meanwhile, ore than 150 different products have Alexa built in, from headphones and PCs to cars and smart home devices. 

The retailer also said that more than 50% of goods sold on Amazon websites over the holiday period had come from small and medium-sized sellers – and that third-party sales were growing faster than Amazon’s own sales. Nearly 200,000 small and medium-sized sellers made more than $100,000 in sales in Amazon’s shops in 2018. It also launched pop-up stores for customers in six European countries, including the UK, over Christmas.  

During the year, Amazon’s hourly minimum wage went into effect in the UK, where it stands at £10.50 in London and £9.50 outside, and in the US, where it stands at $15.More than 250,000 employees benefit from the new minimum wage in the US and 17,000 in the UK. The change, it said, had led to a record 850,000 applications to work at Amazon in the US in October 2018. That’s more than double the previous record for the most applications received in a month. 

eBay reports growth and says it will focus on the user experience

Earlier in the week, eBay reported revenues of $2.9bn (£2.2bn) in the quarter to December 31 – up by 6% on the same time last year. In the full-year the US-based marketplace reported revenues of $10.7bn (£8.2bn), up by 8% o the previous year. 

It said active buyers had grown by 4% during the quarter, taking its total to 179m active buyers around the world. Marketplace sales delivered revenue of $2.3bn (£1.8bn) during the fourth quarter.

“We delivered record earnings for the fourth quarter and full year 2018,” said Devin Wenig, president and chief executive of eBay. “In 2019 our focus will be on further improvements to the eBay user experience, while pursuing significant long-term growth opportunities in advertising and payments. We are confident in the strength of our business and future growth prospects, as demonstrated by our decision to institute eBay’s first-ever dividend and increase our share repurchase programme.”

New services launched during the year included the launch of installation services for those buying auto, home and electronics goods, and the expansion of eBay Authenticate to the jewellery category. eBay Instant Selling was launched, enabling consumers to sell their smartphones and get paid immediately through an eBay voucher. 

Looking ahead, eBay expects revenues to stay relatively flat, with growth of between 0% and 2% in the first quarter, and between 1% and 3% in the full-year.

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