Amazon will focus on these five areas investment in 2018
Amazon has been investing in new businesses. In addition to operating a huge e-commerce platform, it also owns the world's largest public cloud computing service, and it entered the grocery market by buying Whole Foods last year.
According to Amazon's 2017 Q4 financial report, it will focus on the following five areas by 2018:
1 increase the investment in Alexa
There are many companies that want to support Alexa with their own devices. Amazon CEO Jeff Bezos wrote in Amazon's Q4 financial report: "We had very optimistic forecast about Alexa in 2017 and the results were well above expectations." The company expects to increase its investment in Alexa by 2018 .
Amazon has dominated the smart speaker market. More and more manufacturers are integrating Amazon voice assistant Alexa into their devices. Amazon data shows that more than 4,000 smart home devices support Alexa systems. According
to a survey by Strategy Analytics, 75 % of Amazon echo users said they will buy smart speakers that still supporting Alexa voice assistant next time.
2 miscellaneous goods delivery
Amazon acquired Whole Foods in 2017. Amazon is expected to integrate prime with whole foods in 2018.There are many overlapping customers between the two, and adding prime membership services can increase the loyalty of whole food
Amazon CFO Brian Olsavsky said the company expects to invest more in a new grocery project, Amazon Fresh. Whole Foods will help Amazon strengthen its ability to run food-based operations and act as a local distribution center to expand its business. As Whole Foods signed a contract with Instacart-a staple food distribution company by 2020, it would not be easy for Amazon to integrate with AmazonFresh. But Amazon can do the groundwork early, and it may terminate its contract with insta Instacart early.
3 video content
Amazon doubled the video content budget last year, . Olsavsky notes that video content is highly engaged and Amazon expects to continue adding more video content.
It is understood that Prime members spend more than average on video content. As the Prime Affiliate program expands internationally, the role of video content becomes even greater.
Amazon invested nearly $ 4.5 billion in video content last year,less than Netflix's estimatedbinvestment of $ 7.5-8.8 billion this year, but the distance between the two is rapidly shrinking.
4 AWS infrastructure
Amazon reversed the situation in 2017 Q4 after a 10-quarter slowdown in AWS revenue growth for cloud services, with AWS revenue up 44 per cent year-on-year. Up from 42 % in the previous two quarters. Amazon will continue to invest in
AWS infrastructure, as well as in sales and technical teams.
AWS's investment also supports Amazon's investment in video and Alexa.Amazon uses the same infrastructure as AWS to support streaming video, so investing in AWS will likely increase the number of streaming viewing hours and demand for
AWS within Amazon. It's the same case for Alexa. Therefore, investing in AWS is central to investing in other growth initiatives in the Amazon.
Video and Alexa also need AWS infrastructure support, investing in AWS is investing in Amazon business growth.
5 advertising tools
Amazon's advertising business has a significant impact on its profits in 2017 Q4. A small part of Amazon business has generated higher profits, so Amazon will expand investment in this area. Dave Fildes, director of investor relations at Amazon, said at the 2017 Q4 financial conference that he will continue to build more new dvertising tools.
At present, most of Amazon's advertising business is limited to the station, but it is estimated that it will start investing off-site advertising this year.
Amazon's cloud computing services and advertising investments has begun to pay off, with continued investment in video brings more prime users to Amazon, and investing in Alexa and groceries allowes it to get more money.