Recently, Amazon announced its financial report for the first quarter of 2022, recording Amazon’s first loss in seven years, and its revenue growth rate hit a new low in 20 years. At the same time, for many cross-border e-commerce sellers who rely on Amazon, it is not difficult to see from their disclosed financial reports that the situation is not ideal.

Amazon loses first in seven years
Market value evaporated by more than 200 billion US dollars in one day

According to Amazon’s first-quarter financial report, Amazon’s net sales were $116.444 billion, an increase of 7% compared with $108.518 billion in the same period last year, the slowest growth rate in two decades.

Compared with slowing revenue growth, Amazon 's operating costs have risen sharply, soaring 16% to $71 billion. With the combined effects of inflationary pressures, labor wages and supply chain instability caused by the world situation, Amazon has begun to break out of the dividend period of the epidemic and faces a more difficult and complex market environment.

Meanwhile, Amazon shares tumbled nearly 14% on Friday as macroeconomic pressures mounted as inflation hit sales. Preliminary statistics show that Amazon’s market value has evaporated by about $206.2 billion in one day.

Data shows that Amazon’s operating income fell to $3.7 billion in the first quarter, down 58% year-on -year , and $8.9 billion in the first quarter of 2021.

Net profit turned a loss of US$3.844 billion, down 147% , compared with US$8.107 billion in the same period last year. It recorded a pretax loss of $7.6 billion on its common stock investment in electric car company Rivian alone.

In terms of market segments, Amazon's North American and international market revenue lost $1.568 billion and $1.281 billion, respectively.

The only dazzling data is the cloud computing business AWS, with net sales of $18.441 billion in the first quarter, an increase of 37% , exceeding 32% in 2021. It can be seen that AWS is playing an indispensable role in helping companies survive the epidemic and move more work to the cloud.

From the perspective of segmented businesses, product sales in the first quarter were US$56.46 billion, down 1.8% year-on-year, and service sales were US$59.99 billion, up 17.6% year-on-year.

This means that, on the one hand, online sales have cooled, American consumers have turned to physical consumption and service consumption, and European and American consumers are returning to their pre-pandemic consumption habits and increasing offline spending. On the other hand, Amazon's services business has surpassed the e-commerce business that used to be the core business.

In the face of the challenges brought by the epidemic and war to the e-commerce business, as well as a significant decline in online sales in the first quarter.

Amazon expects second-quarter fiscal 2022 net sales of $116 billion to $121 billion, up 3% to 7% year over year, including an expected negative impact of about 200 basis points from currency changes. Operating profit will be -$1 billion to $3 billion.

Seller's net profit fell collectively

Amazon is still like this, and the situation of Chinese cross-border e-commerce sellers who rely heavily on Amazon is not very good. Most sellers increase their income without increasing their profits, and even worse, their revenue and profits both decline, or they lose money.

Cross-border Link: During the reporting period, the operating income was 1.466 billion yuan, down 51.01% year-on-year, and the net profit attributable to shareholders of the listed company was 10.16 million yuan, down 121.21% year-on-year.

The 2021 financial report shows that during the reporting period, the company's cross-border export e-commerce business achieved operating income of 2.68 billion yuan, a year-on-year decrease of 73.41%. The revenue of independent stations and third-party platforms both plummeted, of which the revenue of independent stations was 609 million yuan, a year-on-year decrease of 84.99%; the revenue of third-party platforms was 2.07 billion yuan, a year-on-year decrease of 65.61%.

Rebecca: During the reporting period, the operating income was 322 million yuan, a year-on-year increase of 4.55%, and the net profit attributable to shareholders of the listed company was 12.78 million yuan, a year-on-year decrease of 28.33%.

Jemet: During the reporting period, the operating income was 184 million yuan, a year-on-year increase of 16.78%, and the net profit attributable to shareholders of the listed company was 9.08 million yuan, a year-on-year decrease of 165.71%.

Huading (parent company of Tongtuo Technology): During the reporting period, the operating income was 1.569 billion yuan, down 33.79% year-on-year, and the net profit attributable to shareholders of listed companies was 76.23 million yuan, down 187.09% year-on-year.

Tianze Information (youkeshu parent company): During the reporting period, the operating income was 230 million yuan, a year-on-year decrease of 71.13%, and the net profit attributable to shareholders of the listed company was 27 million yuan, a year-on-year decrease of 13.96%.

If it is said that the above-mentioned platform sales are affected by the platform policy and the European and American environment, but the performance of the "top students" of the independent station in Southeast Asia is not very good. Such as:

Jihong Co., Ltd.: During the reporting period, the operating income was 1.203 billion yuan, a year-on-year increase of 2.08%, and the net profit attributable to shareholders of the listed company was 42.87 million yuan, a year-on-year decrease of 53.56%.

Things are bad for Amazon and sellers, and their "suppliers" are implicated. E.g:

Bestak (Amazon supplier): During the reporting period, the operating income was 270 million yuan, a year-on-year increase of 3.81%, and the net profit attributable to shareholders of the listed company was 17.72 million yuan, a year-on-year decrease of 57.17%.

Sunwin Technology (3C big seller): During the reporting period, the operating income was 132 million yuan, a year-on-year increase of 20.07%, and the net profit attributable to shareholders of the listed company was 10.87 million yuan, a year-on-year decrease of 13.88%.

To sum up, under the background of high global inflation, low consumer shopping desire, and the impact of the epidemic and war on the supply chain, the Amazon platform, sellers and suppliers have high costs and declining profits. It seems that the entire cross-border ecology in the first quarter of 2022. shrouded in haze.

Fortunately, in July in the second quarter, sellers will usher in Prime Day, and perhaps the opportunity to turn the tide against the wind is not far away…