Amazon on Thursday reported its fourth-quarter 2019 results, in which it listed Prime membership services as one of the main contributors to growth in the holiday shopping season. Amazon said it now has more than 150 million Prime members, a record number of people joining Prime’s membership service in the quarter. Amazon has added more than 50 million Prime members since it surpassed 100 million subscribers in 2018.
It is reported that more people order Prime membership services during the holiday shopping season than at any other time of the year, and people do so to ensure that holiday gifts are delivered early. But Amazon also attributed the surge in Prime membership to the service’s launch in Brazil last September. Previously, Prime members had to order Amazon Fresh for $14.99 a month to enjoy the “same-day delivery” service. In October last year, the service was no longer charged, and Day reached the benefit of all Prime members.
Last year Amazon worked hard to prevent users from placing orders elsewhere. The move also helped retain existing Prime users and add new users. “same-day delivery” is convenient for users, but not cheap for Amazon.
But other businesses offset logistics costs.
Amazon said it posted revenue of $87.4 billion in the fourth quarter and a profit of nearly $3.3 billion, both of which exceeded Wall Street expectations. Amazon’s retail division is booming, and revenue from its cloud computing division, Amazon’s web services and advertising divisions, has also surged. All this has helped Amazon offset rising shipping costs. While the company continues to expand its logistics network, the cost of logistics has soared to $12.9 billion, but that is not enough to hurt Amazon’s profitability.