Amazon grows by 44% Year over Year

However, Amazon already has plans for further growth: The marketplace is, for example, beginning to tests its live shopping concept Amazon Explore in Europe as well now. Moreover, the new Amazon Delivery Service Partner Program is intended to encourage private individuals to set up Amazon courier companies.

In addition, Prime Day, one of the best-selling deal events, will probably take place this quarter. In our latest blog post, we show which measures brand manufacturers can take to benefit from Prime Day 2021 on Amazon.

General Updates

Amazon grows 44% in Q1 2021

Amazon generated $108.5 billion in global revenue in Q1 2021. This represents + 44% year-over-year growth. In the second quarter, Amazon expects further growth and sales of up to $116 billion. It also confirmed that Prime Day 2021 will be held in June to avoid the July vacation period. However, in Canada and India, Prime Day will be postponed indefinitely due to a quickly growing number of COVID-19 infection postponed indefinitely
due to a quickly growing number of COVID-19 infections.

Amazon is responsible for products on its marketplace in the US

Following a court ruling, Amazon must be liable for all products on its platform in the US – even if they are sold by FBA sellers. The ruling has no direct impact on Europe. However, it is possible that, as a consequence, Amazon will label products from third-party sellers on its marketplace more transparently. Many shoppers are not sufficiently aware about who they actually buy products from via the e-commerce platform.

Amazon verifies addresses of FBA sellers in the US

After FBA sellers on the American marketplace had to provide their business addresses last year, Amazon is now checking their accuracy. Sellers are currently being sent postcards with a QR code that is linked to their address stored in Amazon’s system. The recipients must scan the code within 60 days to verify their address details. Amazon has launched the initiative to protect itself from fake sellers: in 2020 alone, 2 million fake products were taken off the platform.

Chinese sellers suspended due to fake reviews

Amazon has suspended the accounts of more than ten major Chinese sellers, including Amazon native brands like Mpow and Aukey. The reason for the suspension could be a violation of the platform’s policies: Since the products of the blocked sellers had an unusually high number of positive reviews, it is reasonable to assume that customers were asked for reviews in a prohibited manner. Amazon is now reviewing and deleting the reviews.

Live shopping in Europe soon with Amazon Explore

Amazon has launched its live shopping concept “Amazon Explore” in the US in autumn 2020, now it is supposed to come to the European market. The goal is to make virtual shopping in brick-and-mortar stores more appealing to customers by allowing them to make individual appointments with retailers and get advice on their purchases. With this service, Amazon wants to support smaller retailers in particular, who had to close their stores during lockdowns caused by the COVID-19 pandemic.

Amazon attracts founders with Delivery Partner program

The “Amazon Delivery Service Partner” program is intended to encourage private individuals to start their own courier companies in order to work with Amazon. A sales potential of up to 2.5 million € is promised, as well as a profit of 60,000€ to 140,000€. Critics point out that Amazon does not provide enough information about the risks of founding a company – in addition, a de facto dependence on the e-commerce platform would develop.

Zalando increases revenue by 47% in Q1 2021

Besides Amazon, German online fashion marketplace Zalando also benefited from the change in shopping behavior caused by the COVID-19 pandemic in the first quarter of 2021: The stock-listed company’s sales rose by 47% YOY to 2.2 billion €. In addition to high customer demand, a lower returns rate also had a positive impact on Zalando’s quarterly results.

13.7% e-commerce growth expected in the US in 2021

Market research firm eMarketer has revised its figures for 2021: Due to the ongoing COVID-19 pandemic, an e-commerce market growth of 13.7% (instead of 12.8%) is expected in the US in 2021. This would be equal to 15.5% of total retail sales in the country. The strongest growth is expected in the apparel category. Amazon is expected to generate at least a quarter of all the sales in every product category – with the exception of automobiles. As a comparison: In 2020, the US e-commerce industry grew by 32.4% and accounted for 14.4% of total retail revenues.

What caught our attention

Amazon is focusing on customization: For some products, there is now the option that customers can put together bundles themselves. Via the “Customize now” button, different variants of a product can be combined. Presumably, however, this feature is only available for FBM sellers due to higher logistical complexity.

There are new targeting options for Sponsored Brand Video campaigns: From now on, campaigns can be set for ASIN, category, generic and branded keywords. Until recently, only targeting keywords from the product title could generate an ad impression.

Comment: Amazon’s Q1 results

Amazon has released its Q1 2021 results. What the key figures tell us:

• Amazon’s net sales grew + 44% YOY:
  from $75 billion in Q1 2020 to $108 billion in Q1 2021.

Experts had expected Amazon’s net sales to be between $100 billion and $106 billion, which would have represented an increase of up to + 40% YOY. Once again, Amazon exceeded expectations!

• Amazon’s international sales grew faster than in the US:
  + 60% international vs. + 40% in the US

We are not surprised by this development. After all, we had already expected international growth, particularly in the European markets, to be greater than the growth in the US due to longer and stricter lockdowns.

• Amazon’s advertising revenue grew + 77% YOY:
  from $3.9 billion in Q1 2020 to $6.9 billion in Q1 2021.

Amazon’s current annual growth in advertising clearly exceeds the growth rates of recent quarters.

• Q1 2020 was the last quarter not significantly impacted by the COVID-19 pandemic. E-commerce sales skyrocketed from Q2 2020 onwards. We, therefore, expect that the YOY growth will be smaller in Q2 – but perhaps Amazon will surprise us again.

Remdash: Vendor & Seller Central Revenue

With Remdash, you can track your sales from both Vendor and Seller Central:

• Filter for Ordered Revenue vs. Shipped COGS
• Compare product groups with each other
• Compare single ASINs with each other
• Compare global revenue vs. marketplaces revenue

Interested in Remdash? Schedule your personal product demo here!

Top 5 Amazon Keywords

Searches for Mother’s Day gifts dominated the keywords in the US, Germany, and Italy. The UK and Spain are the only two countries where COVID-19 masks are still in the top 5 search terms – whereas in France, a new hype around the anime series “Pokémon” seems to have broken out.