Amazon showed strong year-over-year growth in the fourth quarter of 2013, but its rate of growth is actually slowing in some key metrics. Take a look at the numbers, and see what analysts had to say.
Net sales were up a strong 20% to $25.59 billion for the quarter, slightly down from the 22% growth rate in Q4 2012. Worldwide unit growth shows a more dramatic slowing – it was 46% in the fourth quarter of 2011, was 32% in the fourth quarter of 2012, and was 25% in the fourth quarter of 2013.
Amazon revealed third-party sellers’ unit growth in 2011 (65%) and in 2012 (over 40%), but it did not provide this number in 2013. Amazon spokesperson Erik Fairleigh said the company does not provide that metric each quarter. “I do think we’ve disclosed it once or twice, as a one-off, over the past few years. Each quarter we do disclose “total paid unit growth” (25% in Q4 2013), and “3P paid units as a percentage of total paid units” (39% in Q4 2013).”
Wall Street analyst had some thoughts about Amazon’s Q4 growth rates. Cowen and Company noted the strong sales growth – double the growth of the ecommerce industry as a whole using comScore numbers, and said the lower unit sold figure was likely a result of 6 fewer days during the holiday season. “We expect unit sales to rebound modestly off the 4Q13 number as AMZN adds new products (AMZN Fresh rollout) and Prime members (who buy more goods) in 2014.”
RW Baird said, “We view 25% paid unit growth as a yellow flag, although we see potential for acceleration with digital sales internationally.”
Janney Capital Markets said overall, Amazon’s model is shifting to Service Revenue at a faster clip (+45% YoY) including Kindle Content.
The fact that ecommerce grew at only 10% shows a maturation of the industry, and it will be interesting to watch Amazon work on maintaining its growth rates.
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