tv Business Briefing BBC News February 1, 2019 5:30am-5:46am GMT
this is the business briefing. amazon's $72 billion christmas. record sales for the online giant— but fears of a slowdown in growth rattle investors. plus, ‘tremendous progress'. president trump hails success in us china talks — but no sign as yet of a deal to end their damaging trade war. and on the markets: a mixed day on wall street, but the recovery from the pre—christmas sell off continues. us shares have now had their best start to the year since the 1980s. we start with online retail giant amazon — it has broken its own sales records yet again — after the strongest holiday season in its history. but it's predicting a slowdown in growth and that has rattled investors, who sold off the shares in after hours trading. let's show you some of the numbers — because they are staggering.
amazon made revenues of over $72 billion in the three months to the end of december. that was up almost 20% on the same period last year. $3 billion of that was profit — also a record. amazon now has 100 million us subscribers to its prime service, which gives access to on demand movies and tv as well as free delivery. to put that in perspective, netflix has barely half the number of subscribers in the us — at 59 million. the company hit a trillion dollars in stock market value in september. despite a sell—off since then, it's currently the world's most valuable company ahead of microsoft and apple. but amazon has warned that growth will slow in the coming months — as dave lee in san francisco explains. amazon has had a very strong
quarter. the investors are looking forward with a bit of nervousness, because the company has admitted its growth is beginning to slow. this is happening for several reasons. firstly, this will seem completely obvious, amazon is enormous, so these big percentage increases in growth are becoming more and more difficult the more valuable becoming a guess. secondly, the company is now more concerned with making more profit than they used, so is perhaps making fewer acquisitions and embarking on fewer new ventures, which are a big source of growth for the company. thirdly, some of those acquisitions it has made, such as whole foods, have been in areas that, by their nature, have slower growth generally. that could be dragging down the rest of amazon as well. dave lee, bbc news, in francisco. peter veash is ceo of the bio agency — which helps companies with their digital strategy. thank you very much for coming in. what would you be telling amazon
right now if you were the person advises people on their digital strategy. they have slowing growth, what do they do? i think they are in a great place and don't need a huge amount of advice. they are a small pa rt amount of advice. they are a small part of online retail by the huge business and have more to go. the key thing is understanding customer behaviour is off—line to work out, really, how they would ensure that not only can things be delivered until the drones followers around, but actually to enable customers to pick up when the need to. one of the things that are absolutely staggering when looking at this story was only 15% of retail in the united states, its home market, is online. it even has a huge amount of growth potential in its own market. exactly. commerce is a tiny amount of retail. it has a huge way to go. even amazon itself as a tiny part of online commerce. in terms of its other operations, some of its higher margin businesses, those are the
areas where it looks like it is expanding, cloud computing, business to business, advertising. they are now getting more money from that than from their original parts of the business. they have diversifying in an interesting way. the advertising business is quite early for amazon. they are derius contenderfor for amazon. they are derius contender for advertisers against google and facebook. their marketplaces are making them more money than their direct sales. the results were based on relevance before, now you pay to play. that is a change for amazon and consumers. we think of them as a huge player. they are the world's most valuable company. what they do when they come up company. what they do when they come up against the likes of aly baba, for example, a massive company that viewers might not be so familiar with, because they are on the other side of the world. aly baba with, because they are on the other side of the world. aly saba and google, when they start to compete, google, when they start to compete, google is not competing so much with amazon yet, but that will happen. no—one can call the outcome of that. thank you very much for coming out
so thank you very much for coming out so early for us. let's stay early for us. in the us, because president trump has hailed "tremendous progress" after two days of us—china trade talks in washington. they are trying to head off an escalation of the trade war between the two sides — that has seen import tariffs imposed on $360 billion worth of goods. us taxes on many chinese goods are due to rise from 10% to 25% if no deal is reached by the first of march i think the relationship that we have right now with china has never been so advanced. i don't think it's ever been better. but i can tell you for a fact it's never been so advanced. and certainly a deal has never been so advanced. because essentially we don't have a deal. we never had a trade deal. we're gonna have a great trade deal. but we never really had a trade deal with china and now we're gonna have a great trade deal with china if it all works out. and we look forward to it. it's gonna be great for both countries.
well, a lot of gesticulating there. but what does china make of this? sharanjit leyl and our asia business team have been following the story closely in singapore. what is the response into some of the comments we have heard. what level a re the comments we have heard. what level are we in terms of progress? victoria, despite president's optimism you heard there, many challenges remain, fundamental areas including forced technology tra nsfers including forced technology transfers and industrial subsidies. that is what china continues to grant at its firms. even though president trump said he welcomes the move president trump said he welcomes the m ove we re president trump said he welcomes the move were china to buy more us products like 5 million tons of soya beans, that was an announcement was made, the real issues remain. that much first deadline to slap higher ta riffs much first deadline to slap higher tariffs on china's goods is still in place, despite hints earlier that president trump me extended. it is pa rt president trump me extended. it is part of the reason why asian markets are so part of the reason why asian markets are so muted today, in reaction to the conclusion of those talks. the us has been pressing for a change on
issues such as the theft of trade secrets and rules that limit the operation of foreign companies. and all of this comes against the backdrop, we know of the huawei scandal where the usjustice department filed a host of charges against the chinese telecom giant and eschew financial officer. the case of ratcheting up tensions between china and the us at make it financial officer. they said it would only happen during a face—to—face meeting between president trump and his chinese counterpart, xijinping. president trump and his chinese counterpart, xi jinping. but president trump and his chinese counterpart, xijinping. but no doubt it ——no date or location has been set for that meeting yet. no date or location for that meeting, but we have a meeting before that, in the middle of february. what kind of progress to think might be made between people slightly lower down the food chain were selling well, we heard from the us trade representative, richard lycos, saying that challenges remain. they
we re saying that challenges remain. they were hoping to get to the bottom of that with these talks. it is inconclusive what has been done so far. china announcing they will be buying more us products, but as i mentioned those issues around theft of intellectual property, a loss of those things still continue to dog the talks between the two —— lot of. there will be ongoing. thank you very much. now let's brief you on some other business stories. a free trade deal between the european union and japan comes into effect today. the economic partnership agreement took six years to negotiate — and creates an open trading area covering over 600 million people and almost one third of the world's total gdp. japan will scrap 94% of tariffs on eu agricultural and industrial products — and the eu will drop tariffs on 99% of japanese goods. the uk, germany, and france have created a new payments system to allow european businesses to trade with iran without falling foul of us sanctions. all three opposed last year's decision by president trump to abandon a 2015 deal to lift sanctions on iran —
in return for suspension of its nuclear programme. it will initially cover food, drugs and consumer goods — but not oil, iran's main source of foreign cash. and now, what's trending in the business news this morning. 0n the wall street journal, trump gives upbeat assessment of trade talks with china. the two sides moving closer to settling their trade war on business insider, facebook thinks amazon's ad business has officially become a threat. facebook listed amazon as a competitor for the first time in its annual report, saying it competes with amazon in advertising. this is what our guest was saying a
moment ago. an interesting one from wired: howard schultz: presidential hopeful, twitter ratio king. it says the former starbucks boss shows he has no chance of becoming president because of his shockingly low twitter ratio — the number of people who like or retweet what he says rather than argue with him. heaven knows what my twitter ratio would look like. and don't forget — let us know what you are spotting online — use the hashtag bbcthebriefing. that's it for the business briefing this hour. but before we go, here are the markets: it has been a bit of a mixed session across wall street, but some of those hopes that we might get more stimulus from china is bullying stocks in the asia—pacific region. plenty more news coming up in a moment —— buoying. heavy snow has swept across southern
england and wales overnight, disrupting travel and leaving hundreds of people trapped in their cars on a major trunk road in cornwall. kathryn stanczyszyn reports. it might mean a sir dave for some, but these —— for these motor is it meant being stranded in subzero to riches for up to ten hours. more than 100 vehicles were caught up in heavy snowfall on the 830 on bodmin moor in cornwall. emergency services said they made intensive efforts to get people out but conditions were tricky. paul aiton was on her way back home from a business meeting when her journey back home from a business meeting when herjourney stopped abruptly —— paula martin. from getting stuck at four o'clock this afternoon, it is
110w four o'clock this afternoon, it is now 1:20 four o'clock this afternoon, it is now1:20 a.m.. we four o'clock this afternoon, it is now 1:20 a.m.. we have not seen any critters or snowploughs. the traffic we re critters or snowploughs. the traffic were stopping all of the lanes there we re were stopping all of the lanes there were abandoned cars and people leaving their cars. but where there isa leaving their cars. but where there is a problem there are always helpers. the famous jamaica inn opened its doors to those in need of shelter, making up beds in the restau ra nt shelter, making up beds in the restaurant and bar when the rooms we re restaurant and bar when the rooms were all providing hospitality for more than 100 walkins. and 400 stu d e nts more than 100 walkins. and 400 students are callous college in bodman had to make it their home for the night because the roads were so treacherous. we left when the snow picked up. we got quite back quite quick. and we slid into the back of someone on quick. and we slid into the back of someone on the way back, and deemed it too dangerous to travel home. so we pulled into a petrol station and we pulled into a petrol station and we called our parents and walked back to the school. many people across the south and west of england and in wales are waking up to a blanket of white. the met office yellow warnings are still in place across england, wales, scotland. ra ilca rd across england, wales, scotland. railcard is a warning commuters that
friday morning could be a struggle, with many networks operating reduced services. the forecast is for things to improve from lunchtime, although some parts of the uk will see wintry showers into the weekend. that report by kathryn stanczyszyn. and for more on the weather disruption, breakfast is at 6:00. this is the briefing from bbc news. the latest headlines: tens of millions of americans are still enduring temperatures as low as —50 celsius across several midwestern states. it's been more than 20 years since a similar polar vortex weather system covered such a large area. the number of people known to have been killed by the collapsed dam in brazil has risen to 110 with 238 others still unaccounted for. the mining company has pledged to compensate the families of victims. perhaps some snow across scotland. venezuela's self—declared interim presidentjuan guaido has said his family has been threatened, amid the country's
continuing political crisis. in a speech at venezuela's central university, he said police had visited his family home looking for his wife. now it's time to look at the stories that are making the headlines in the media across the world. we begin with the guardian who say according to the uk institute of directors, nearly one in three british businesses are actively considering relocating some of their operations abroad or have already moved them to cope with a hard brexit. meanwhile the new york times focusses on italy which has officially slipped into recession. the paper says europe as a whole is essentially at an economic standstill, raising anxieties that the world is on the verge of a significant slowdown. the japan times is a little more upbeat on the european economy as japan and the eu's free trade pact comes into force today, creating a free trade area that covers about a third of the world's economy.
the pact will eliminate tariffs on most reciprocal trade and encourage business investment the paper says in the telegraph business pages, amazon has revealed record profits. the online retail giant said revenues in the final three months of 2018 grew by 20% to $72.4 billion. while the company's profits surpassed $3 billion for the first time.