Online retail giant Amazon (NASDAQ:AMZN) saw profits fall over 75 percent in the second quarter of the year, after pushing on with expansion plans in the Asian market.
The company reported a profit of $197 million in the three months to the end of June, down 77 percent from the same period the year before. Expenses increased to $37.3 billion, up 28 percent year-on-year, after the company trialled the Prime Now service in Singapore and invested in new products and services.
However, revenues jumped nearly 50 percent over the same period, with evenues at its profitable web services division, which sells cloud computing services such as data storage, jumped 42 percent to $4.1 billion.
Consumer retail sales in the three months to the end of June totalled $33.9 billion, rising 17 percent overseas and 27 percent in North America, still the firm’s biggest market. Figures were also boosted by a 50 percent rise in the sale of subscription services – including the Prime membership that the group started to compete with streaming giant Netflix.
The figures come jut one day after Amazon trialled their same-day delivery service, Prime Now, in Singapore, which led to an influx of orders unable to be fulfilled as the company struggled to keep up with demand.
The company have always chosen to spend on expansion rather than focus on making a profit. Amazon founder Jeff Bezos said “Our teams remain heads-down and focused on customers”, but left defending the decision on a conference call with analysts to CFO Brian Olsavsky.
Amazon shares are currently trading down 0.65 percent on the news, at 1,017.50 (1011GMT).