Amazon eyes business services

Amazon eyes business services

Schools, hospitals and governments have quickly embraced Amazon as a source of supplies, propelling the company’s three-year-old business platform into a €8.6bn-plus annual enterprise. Its success may soon provide as much revenue as the Amazon Web Services cloud-computing division and its digital-advertising services.

The e-commerce giant will likely keep expanding the business service internationally — it is currently in eight countries — in response to demand from customers, said Prentis Wilson, an Amazon vice-president who oversees the division.

“We have a significant number of customers that use us in four or five countries,” Mr Wilson said in an interview, adding there are requests to expand the service to more countries.”

The business operates in the US, Germany, UK, Japan, France, Italy, Spain, and India.

Amazon’s consumer retail business operates in those countries as well as Australia, Brazil, Mexico, and the Netherlands, highlighting potential places for further expansion.

Amazon Business is the latest example of the Seattle-based company tapping into new revenue sources, which has helped it maintain a double-digit growth rate even as annual sales are projected to top €173bn this year.

The programme uses Amazon’s existing warehouse and delivery network built for its retail customers. And it follows the retail model of offering one-site shopping for hundreds of millions of goods, with computer keyboards, janitorial supplies, office supplies, and canteen snacks among the top categories.

Sales volume for Amazon Business will exceed $25bn (€21.6bn) by 2021, according to analysts at Robert W Baird.

“It makes a lot of sense for us to leverage existing assets,” said Mr Wilson.

US businesses are shifting their supply-shopping online from less efficient methods such as browsing print catalogues, faxing orders, and telephoning sales representatives.

By 2020, 12.1% of $9.39 trillion in business-to-business spending will be online, according to Forrester Research.

The internet giant launched Amazon Business in the US in 2015 and reached $1bn in sales a year later.

In the US, customers include large schools, hospitals, more than half of the Fortune 100 companies, and local governments, says Amazon.

Bloomberg

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