Amazon’s Australian revenue reached a record-high of $7.7 billion last year, driven by a strong growth in its Prime membership subscription business.
Its Prime subscription business reported revenues of $480.4 million, a 39% increase year-on-year. Prime membership not only gives users access benefits such as same-day delivery of its e-commerce products and to streaming of its video content, but will also soon offer free Alexa+ service too – the company’s latest AI-powered version of its digital assistant.
Its cloud computing division, Amazon Web Services, recorded an 18% increase in revenue to $3.9 billion over that same period.
Revenues from Amazon’s e-commerce business rose 23% to $3.8 billion in the 12 months to December 31, reported the Australian Financial Review.
The company plans to open a new large warehouse in Sydney in 2026 which will allow it to expand into “big box retail” offering consumers furniture and large electrical items, competing more directly with consumer electronic retailers in the country.
Its online store accounted for the majority of the group’s revenues as sales rose 19% to $1.9 billion. Revenue from third-party marketplace sellers increased by 48% to $839.5 million.
Amazon Prime Video
Over the last few months, the company has had to compete with ultra-cheap e-commerce platforms Temu and Shein.
Temu and Shein have rapidly attracted millions of customers to their platforms and generated sales worth several billions.
The fierce competition in the e-commerce space has already resulted in a casualty by way of rival Wesfarmers’ Catch platform which will soon shut down.
Meanwhile, advertising revenue, which includes ads on its Prime video streaming platform and online store, grew from $153.4 million to $242.5 million last year. Amazon’s retail division posted net income of $3.6 million for the year, compared to a loss of $8.84 million the year prior.
The major push for Amazon over the coming months is bound to be its AI and AWS cloud computing business.
AWS which is already used by several retailers in the country offers companies the ability to move their IT operations from on-premise data centres into the cloud.
AWS Australia paid $2.8 billion in cloud service fees, which led to an operating loss of $65.8 million. The division also reported an after-tax loss of $28.3 million last year, compared to a loss of $86.3 million the year before.
Amazon’s Alexa+ which was unveiled recently in the US and will subsequently make its way to Australia, will heavily rely on the company’s cloud computing platform.
Alexa+ could be a major revenue driver for retailers as some of its “agentic” capabilities include independently surfing the web on your behalf and even making purchase decisions.
Last year, Amazon released six new foundational models for generative AI. Three of those models were reported to be “at least 75% less expensive than the best-performing models in their respective intelligence class”.
Alexa+ will tap into these models as well as others available on Amazon Bedrock – a platform, which includes models from companies including Meta, Anthropic, Mistral AI and DeepSeek.
Last month, Amazon cautioned that an immense demand for AI services is resulting in cloud computing services by major companies to reach their current capacity.
Although it is investing around A$158.85 billion, Amazon said that it could face capacity constraints in its cloud computing division over the short term.
Chief Executive Officer Andy Jassy said the supply of chips from third parties as well as Amazon’s own chip design unit, along with power capacity were limiting the ability of Amazon Web Services to bring new data centers online.
Globally, Amazon spent around $41.78 billion in capital expenditures in the last three months of 2024, the majority of which went toward AI-related projects within AWS.
