Amazon’s Willingness to Go After Emerging Markets Encouraging – Truist
2022.06.17 21:11
Amazon’s (AMZN) Willingness to go After Emerging Markets Encouraging – Truist
By Sam Boughedda
Truist analyst Youssef Squali said in a note to investors Friday that they are encouraged by Amazon’s (NASDAQ:AMZN) willingness to go after emerging markets, where e-commerce penetration is lower than most developed markets but where growth is much faster.
In a broad-based note on internet and digital media (IDM) stocks, Squali spoke about the recent sell-off in IDM stocks “amid a macro-led meltdown.”
The analyst noted that Alibaba ‘s (NYSE:BABA) 6.18 shopping festival kicks off this weekend.
“Management indicated that there was strong merchant interest for 6.18 participation during its earnings call in mid-May, which we believe could be partly due to inventory excesses,” said Squali.
Commenting on Amazon, the analyst said they are encouraged by a Business Insider report that Amazon will be launching in five new markets by April 2023. The five reported new markets are Belgium, Chile, Colombia, Nigeria, and South Africa.
“We are encouraged by Amazon’s willingness to go after these emerging markets, where ecommerce penetration is lower than most developed markets but where growth is much faster,” he wrote.
Moving on to Amazon’s Prime Day, which will be held on on July 12-13, Squali stated: “Last year Amazon generated $11.2B in GMV during its Prime Day sales event held on June 21-22, up from $10.4B in 2020, according to JungleScout, a leading ecommerce data platform. In terms of revenue, we estimate that 2021 Prime Day contributed ~400bps to Y/Y growth to 2Q21 results, or ~$3.5B in revenue. We will be monitoring for updates on the success of AMZN’s event this year.”
