Amazon Refines Stores Formats, Exits Certain Stores With Low Growth Potential
E-commerce giant Amazon has announced plans to exit some fresh supermarkets and Go convenience stores as it is currently refining stores with low growth potential.
The company disclosed such a move was necessitated after it took a hard look at the store level in the fourth Quarter (Q4), where it plans to slow things down and also where it plans to get out of some leases.
As part of a periodic assessment of its grocery portfolio, the company decided to exit certain stores. It also took a $720 million impairment charge in the fourth quarter.
Speaking on the company’s plan to close some fresh supermarkets and Go convenience stores, Amazon’s finance Chief Brian Olsavsky said “We are continuously refining our store formats to find the ones that will resonate with customers, will build our grocery brand and will allow us to scale meaningfully”.
The company’s CEO Andy Jassy stated that the earnings call reveals Amazon’s stores need to resonate with customers, noting that the company needs to be in a better position.
He further disclosed that the company is optimistic about positive revenue growth in 2023, as it sees some encouraging signs, and when it finds the equation, there will be an expansion.
Amazon currently operates several dozen fresh grocery stores and 28 Amazon Go convenience stores.
Investors King understands that last month, the e-commerce giant closed one of its London fresh stores and opened another elsewhere, in a sign that the company is cooling its grocery retail expansion plans for the capital.
The tech giant saw physical store sales climb in the fiscal 2022 fourth quarter (Q4) and full year as it posted strong overall sales gains for both periods.
Meanwhile, fiscal 2022 had a net loss of $2.72 billion, or 27 cents per diluted share, versus net earnings of $33.36 billion, or $3.24 per diluted share, in 2021.
Signals of a slowdown by Amazon trying to balance growth efforts and control costs amid a gloomy economic forecast had recently popped up in the Amazon Fresh grocery store business.
Following a stream of openings in the United States over the past couple of years, Amazon Fresh’s expansion appears to have bogged down, with a number of sites for planned new stores sitting idle.
Still, the company’s CEO Andy Jassy and other Amazon executives have described the Store’s business, including grocery, as one of the units with big opportunities ahead.
iPhones Take the Lead in the Smartphone Race, Beating Samsung
The global smartphone market remains highly competitive with major players such as Apple, Samsung, Xiaomi, Oppo, and Huawei vying for dominance.
According to recent data from GlobalStats, Apple has overtaken Samsung as the most popular smartphone in the first two months of 2023. While this shift is significant, the question remains is it a short-term trend or a long-term shift in the global smartphone market?
In 2022, Samsung had the highest market share of all smartphones but in October of the same year, Apple surpassed Samsung’s market share by just 0.2%. Despite this brief takeover, Samsung regained its position the following month.
Apple’s market share in November and December 2022 was slightly behind each other at 27.48% and 26.98%, respectively.
iPhones have now become the leading smartphone for two consecutive months. In January, Apple made up 27.6% of the global smartphone share while Samsung accounted for 27.09% of the market share. In February, Apple’s share declined slightly to 27.1% and so did Samsung’s market share to 26.75%.
While these numbers are just estimates, global smartphone users are approximately 6.84 billion. iPhone users accounted for 1.85 billion of global users while 1.82 billion users have chosen Samsung.
Others like the Chinese leading smartphone, Xiaomi has 12.29% of the global smartphone market share in February. Oppo followed with a 6.86% share.
Huawei, however, continued to relinquish its market share since the U.S. and other developed nations imposed a ban on it in their countries for security reasons. Huawei’s market share stood at 4.84% in February.
Investors King’s analysis shows that going forward Apple will continue to record success in existing and new markets going forward because of its strong brand image, customer loyalty, and effective marketing. While Samsung, Apple’s formidable rival will need continuous innovation to differentiate itself in order to catch up with Apple.
However, it is imperative to note that this shift in market share may be due to various factors, including new product releases, marketing strategies and consumer preferences during the period under review.
It is possible that Samsung may regain its top position in the future, especially with the launch of new models such as the Samsung Galaxy S22 and Note 22.
NCC Records 226 Million Mobile Subscriptions
The recent data from the Nigerian Communications Commission (NCC) indicates a rise in the country’s mobile subscriptions.
Investors King reports that Nigeria’s telecom subscriptions increased by 4.61 million as it recorded 226.84 million in February, 2023.
In January 2022, the total number of subscriptions was 225.88 million and since then, has been on a rising trend for the telecommunication industry.
However, MTN has maintained the first position amongst other telecommunication provider companies with about 92.71 million mobile subscriptions.
Next on the telecom provider ranking list is Globacom with 60.76 million subscriptions, Airtel has 60.30 million, and 9mobile has 13.07 million.
The NCC statistics further showed that the number of active telephone connections per 100 residents in a geographical location grew by 119.01 per cent in February this year. While mobile internet subscriptions grew to 156.42 million, broadband penetration rose by 48.49 per cent and subscriptions reached 92.56 million.
In an interview, the Chief Operating Officer, Association of Telecommunications Companies of Nigeria, Ajibola Olude stated that the rising dependence on the internet by citizens and the government has influenced the high records of mobile subscriptions.
Olude mentioned that since the adoption of cashless policy by the Central Bank of Nigeria, CBN, the use of telecommunication increased.
He added that at the federal and state level, sensitisation on digitalisation and ICT has been intensified which has improved the patronage of telecom providers.
Olude said, “A lot of things are connected to the Internet, and they need SIMs. Asides from that, at the Federal and State level, there is serious awareness of the need to adopt ICT. Many services have moved online, and don’t forget that the CBN is pursuing a cashless economy which means that there is a need to probably use an Internet-enabled phone.
“The growth of broadband penetration is increasing the usage of digital technologies. This growth is set to drive broadband penetration beyond the Federal Government’s 50 per cent target for 2023.”
Experts in Nigeria Telco Industry Expresses Concerns Over Low Foreign Capital Inflow
The decline in Foreign capital inflow into the Nigerian telecommunications sector has heightened experts’ concern as the nation looks to deepen its broadband penetration.
In 2019, Nigeria’s telecommunications sector welcomed $942.8 million (N358.26 billion) in capital inflow. This amount declined by $525.4 million to $417. 5 million in 2020 while in 2021, the foreign direct investment into the sector was flat at $417.5 million, the same as in 2020.
In 2022, Nigeria’s economy recorded a boost in foreign direct investment to the tune of N23.982 billion ($57.79 million) in Q1 of 2022. Data obtained from the National Bureau of Statistics disclosed that the figure represents a 2.6 percent increase when compared to the same period last year.
Speaking on some of the reasons for low foreign capital inflow in Nigeria’s telecommunications industry, the President of the Association of Telecommunications Company of Nigeria (ATCON) and Chief Executive Officer of Medallion Communication Limited Engr. Ikechukwu Nnamani disclosed that Nigeria’s unfriendly foreign exchange is a limiting factor that has discouraged foreign investors.
He added that foreign investors have bemoaned the contradictory regulations coming from the Central Bank of Nigeria (CBN), which they claim is discouraging them from making investments in Nigeria.
In his words, “It has been estimated that the country would require $100 billion in investments in the next 10 years to bridge the existing infrastructure gap in the telecom sector, but where is the money going to come from?
“The exchange rate situation in Nigeria is of serious concern for Foreign investors, they are not sure of what the situation would be by the time they want to repatriate their returns. Their returns on investments could be halved due to the fluctuations in the exchange rate. If we want to see investors, we have to first address the foreign exchange situation.”
Meanwhile the 5G network rollout in the country, was said to have reportedly increased foreign investments in the telecommunication sector. According to telecom experts, 5G is expected to headline network investment and drive foreign investment into the sector.
Investors King understands that MTN Nigeria and Airtel Africa which are considered the big players in the industry had their investments in the sector increase to N613.13 billion in 2022. While MTN spent a total of N504.33 billion on the network rollout, Airtel’s investment hit N108.79 billion ($236m) for the same purpose.
The 5G network is projected to contribute $2.2 trillion to the global economy by 2034, according to a 2020 GSMA Intelligence report, titled: ‘The Mobile Economy’.
Nigeria reportedly has one of the largest telecommunications markets in Africa, supported by the second largest economy on the continent after South Africa. In recent years, the telecom sector has benefitted from supportive regulatory measures aimed at improving competition and developing infrastructure. This has helped boost the country’s broadband sector, which remains strongly focussed on mobile connectivity.
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