This one number explains the value Amazon places on Australia

Angus Kidman 3 February 2017

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Time for a fiscal reality check, folks.

Amazon.com put out its annual results this morning. It didn't have anything specific to say about the much-rumoured plans for its Australian expansion, save for a brief mention of expanding Amazon Prime Video into 200 new markets, of which Australia was one. But you wouldn't expect it to: results announcements mostly concentrate on what's already happened, not what's happening in the future.

However, there was one figure that offers a useful perspective on Amazon's global ambitions. It wasn't the US$136 billion in sales it enjoyed across the year, as enormous as that is. It wasn't the fact that US$136 billion in sales only translates to US$2.4 billion in net income, as astounding as that is. It was the proportion of Amazon's revenues that comes from North America: 59%.

Yes, almost two-thirds of Amazon's revenues come from its home base. 32% come from international sales, and 9% come from Amazon Web Services, its cloud computing product.

That number reminds you that even though Amazon's local arrival could create massive disruption for all sorts of retailers, the Australian operation going to be a very small minnow in a very large fish tank, most of which is taken up by a giant American bloater fish. It also explain why Amazon can display such an apparently callow attitude to its international viewers, something we noted earlier this week when discussing how many Amazon Prime Original series are being delayed outside the US for no obvious reason. Clearly, Amazon just doesn't think it has to care that much.

Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.

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