12/25/2023 0 Comments Andy jassy ceo amazonpeters thevergeAs we were bringing this new capacity online, the labor market tightened considerably, making it challenging both to receive all of the inventory our vendors and sellers wanted to send us and to place that inventory as close to customers as we typically do. We spent Amazon’s first 25 years building a very large fulfillment network, and then had to double it in the last 24 months to meet customer demand. This growth also created short-term logistics and cost challenges. We weren’t sure what to expect in 2021, but the fact that we continued to grow at double digit rates (with a two-year Consumer compounded annual growth rate of 29%) was encouraging as customers appreciated the role Amazon played for them during the pandemic, and started using Amazon for a larger amount of their household purchases. We realized the equivalent of three years’ forecasted growth in about 15 months.Īs the world opened up again starting in late Q2 2021, and more people ventured out to eat, shop, and travel, consumer spending returned to being spread over many more entities. In 2020, Amazon’s North America and International Consumer revenue grew 39% YoY on the very large 2019 revenue base of $245 billion and, this extraordinary growth extended into 2021 with revenue increasing 43% YoY in Q1 2021. This shift by so many companies (along with the economy recovering) helped re-accelerate AWS’s revenue growth to 37% YoY in 2021.Ĭonversely, our Consumer revenue grew dramatically in 2020. Many concluded that they didn’t want to continue managing their technology infrastructure themselves, and made the decision to accelerate their move to the cloud. Concurrently, companies were stepping back and determining what they wanted to change coming out of the pandemic. This was due in part to the uncertainty and slowing demand that so many businesses encountered, but also in part to our helping companies optimize their AWS footprint to save money. In the first year of the pandemic, AWS revenue continued to grow at a rapid clip-30% year over year (“YoY”) in 2020 on a $35 billion annual revenue base in 2019-but slower than the 37% YoY growth in 2019. Our AWS and Consumer businesses have had different demand trajectories during the pandemic. Whether companies saw extraordinary demand spikes, or demand diminish quickly with reduced external consumption, the cloud’s elasticity to scale capacity up and down quickly, as well as AWS’s unusually broad functionality helped millions of companies adjust to these difficult circumstances. AWS played a major role in enabling this business continuity. Businesses and governments also had to shift, practically overnight, from working with colleagues and technology on-premises to working remotely. This meant that hundreds of millions of people relied on Amazon for PPE, food, clothing, and various other items that helped them navigate this unprecedented time. Whatever role Amazon played in the world up to that point became further magnified as most physical venues shut down for long periods of time and people spent their days at home. When the pandemic started in early 2020, few people thought it would be as expansive or long-running as it’s been. Jeff set the bar high on these letters, and I will try to keep them worth reading. But, this is the first time I’ve had the honor of writing our annual shareholder letter as CEO of Amazon. Over the past 25 years at Amazon, I’ve had the opportunity to write many narratives, emails, letters, and keynotes for employees, customers, and partners.
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