Quantcast

Amazon (AMZN) Expands Global Footprint, Forays Into Turkey


Shutterstock photo

Amazon AMZN is expanding its global footprint by launching operations in Turkey. Reportedly, this e-commerce giant will offer products in 15 categories, including books, electronics, tools, toys and baby goods, from over 1,000 Turkish businesses to customers across the country.

Amazon's launch comes at a difficult time as the Turkish economy battles recession. The country's currency, Lira continues to plunge amid political uncertainties, fiscal tightening and a frail banking system. Further, sanctions imposed by the United States after Turkey refused to release American pastor, Andrew Brunson have been a major setback for the economy.

Per Business Insider, the slump in currency has accelerated inflation, which hit a 15-year high of nearly 16% in July, this year. Moreover, industrial production in the second quarter contracted 0.7% against growth of 1.8% in the first quarter.

Reportedly, Turkish economy grew 5.2% in the second quarter, down from 7.3% expansion in the first quarter. The economy is now expected to contract in the second half of 2018 and first half of 2019. Per OECD data , economic growth is expected to be almost 5% in both 2018 and 2019, which is, however, much better than many other European economies.

Turkish E-commerce Growth Projections Solid

Notably, Turkey, with a population of 80 million, is the world's 17th largest economy, per International Monetary Fund (IMF). The country has a predominantly younger population, and rapid adoption of smartphone has accelerated the proliferation of e-commerce and m-commerce.

Per Informatics Industry Association (TUBISAD), e-commerce market in Turkey was worth almost €6.6 billion in 2016, which was estimated to reach €8.6 billion in 2017 and €10 billion by the end of this year.

The Association of E-commerce Operators (ETID) expects e-commerce market in Turkey to grow between 30% and 35% in 2018. Moreover, e-commerce accounted for a mere 3.5% of the total trade sector in Turkey, which reflects significant room for growth.

These factors bode well for Amazon. Notably, Turkey is the first European country outside the European Union (EU), where this Zacks Rank #2 (Buy) company is launching its operations. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Amazon's Expanding Global Footprint to Aid Growth

Amazon's expanding seller base, distribution strength, strategic acquisitions and partnerships bode well for its dominant position in the global e-commerce market.

Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

Based on its Prime service, the company has expanded into countries like Australia, the Netherlands, Luxembourg and Singapore. It also has an additional facility for customers in Belgium to join Prime and shop in Dutch.

Reportedly, the company is gearing up to make its foray into the clothing, accessories and footwear market of Brazil via its Brazilian marketplace. The latest move will strengthen its footprint in Brazil as well as Latin America.

Recently, Amazon introduced the Hindi version of its online shopping website and application for mobile to make shopping easier for Indians. This bodes well for its strong focus to address the next 100 million customers in India, per Reuters.

We note that Amazon's continuous efforts toward expanding its presence worldwide will help it in sustaining leadership position in the e-commerce market. Furthermore, expansions are strengthening Amazon's competitive position against its global rivals - Walmart WMT , eBay EBAY and Alibaba BABA .

Moreover, the global expansion is expected to drive top-line growth. For third-quarter 2018, Amazon expects net sales between $54 billion and $57.5 billion. The figure is anticipated to grow in the range of 23-31% on a year-over-year basis.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

eBay Inc. (EBAY): Free Stock Analysis Report

Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Alibaba Group Holding Limited (BABA): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Business , Stocks
Referenced Symbols: EBAY , AMZN , BABA , WMT



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?