The 2020 edition of Black Friday did not offer the usual scenes of bustling stores and shoppers lined up outside discount chains and electronics retailers. Instead, most people bought online, if they bought at all.Crowds at malls and city shopping districts were relatively sparse over the holiday weekend in the face of rising coronavirus cases and warnings from the Centers for Disease Control and Prevention to avoid large groups. Major chains closed on Thanksgiving, after years of being open that day. And many Americans did their shopping before the weekend even began, drawn by sales that began in October.Analysts …
In 2015, the chairman and controlling shareholder of the luxury goods group Richemont, Johann Rupert, took to the stage at an industry conference in Monte Carlo and issued a rallying cry to some of his biggest rivals.“I invited the other big groups to create a singular, dominant neutral platform for the luxury goods industry in which we were shareholders,” Mr. Rupert, a blustery South African, recalled this month. “I was talking to Mr. Arnault of LVMH and Mr. Pinault of Kering,” he said, referring to the heads of two major luxury conglomerates, Bernard Arnault and François-Henri Pinault. “I told …
Black Friday — the day that launched 1,000 other shopping holidays — may have lost its place as the “start” of the Christmas shopping season by now (it gets bigger and earlier with each passing year). But the day after Thanksgiving still pulls in a crowd of buyers looking for a bargain and remains a major bellwether for tracking how sales will progress in what is the most important period for the retail and commerce sector.
This year saw growth, but at the low end of the predicted range.
Adobe, which is following online sales in real-time at 80 of the top 100 retailers in …
SEATTLE — Amazon has embarked on an extraordinary hiring binge this year, vacuuming up an average of 1,400 new workers a day and solidifying its power as online shopping becomes more entrenched in the coronavirus pandemic.The hiring has taken place at Amazon’s headquarters in Seattle, at its hundreds of warehouses in rural communities and suburbs, and in countries such as India and Italy. Amazon added 427,300 employees between January and October, pushing its work force to more than 1.2 million people globally, up more than 50 percent from a year ago. Its number of workers now approaches the entire population of Dallas.The …
African cross-border fintech startup Chipper Cash has raised a $30 million Series B funding round led by Ribbit Capital with participation of Bezos Expeditions — the personal VC fund of Amazon CEO Jeff Bezos.
Chipper Cash was founded in San Francisco in 2018 by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled. The company offers mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.
Parallel to its P2P app, the startup also runs Chipper Checkout — a merchant-focused, fee-based payment product that generates the revenue to support Chipper Cash’s free mobile-money business. The company has scaled to 3 million users on its platform and processes an average of 80,000 transactions daily. In June 2020, Chipper Cash reached a monthly payments value of $100 million, according to CEO Ham Serunjogi .
As part of the Series B raise, the startup plans to expand its products and geographic scope. On the product side, that entails offering more business payment solutions, crypto-currency trading options, and investment services.
“We’ll always be a P2P financial transfer platform at our core. But we’ve had demand from our users to offer other value services…like purchasing cryptocurrency assets and making investments in stocks,” Serunjogi told TechCrunch on a call.
Chipper Cash has added beta dropdowns on its website and app to buy and sell Bitcoin and invest in U.S. stocks from Africa — the latter through a partnership with U.S. financial services company DriveWealth.
“We’ll launch [the stock product] in Nigeria first so Nigerians have the option to buy fractional stocks — Tesla shares, Apple shares or Amazon shares and others — through our app. We’ll expand into other countries thereafter,” said Serunjogi.
On the business financial services side, the startup plans to offer more API payments solutions. “We’ve been getting a lot of requests from people on our P2P platform, who also have business enterprises, to be able to collect payments for sale of goods,” explained Serunjogi.
Chipper Cash also plans to use its Series B financing for additional country expansion, which the company will announce by the end of 2021.
Jeff Bezos’s backing of Chipper Cash follows a recent string of events that has elevated the visibility of Africa’s startup scene. Over the past decade, the continent’s tech ecosystem has been one of the fastest growing in the world by year year-over-year expansion in venture capital and startup formation, concentrated in countries such as Nigeria, Kenya, and South Africa.
Bringing Africa’s large unbanked population and underbanked consumers and SMEs online has factored prominently. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data.
As such, fintech has become Africa’s highest-funded tech sector, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019. Even with the rapid venture funding growth over the last decade, Africa’s tech scene had been performance light, with only one known unicorn (e-commerce venture Jumia) a handful of exits, and no major public share offerings. That changed last year.
In April 2019, Jumia — backed by investors including Goldman Sachs and Mastercard — went public in an NYSE IPO. Later in the year, Nigerian fintech company Interswitch achieved unicorn status after a $200 million investment by Visa.
One of the more significant liquidity events in African tech occurred last month, when Stripe acquired Nigerian payment gateway startup Paystack for a reported $200 million.
In an email to TechCrunch, a spokesperson for Bezos Expeditions confirmed the fund’s investment in Chipper Cash, but declined to comment on further plans to back African startups. Per Crunchbase data, the investment would be the first in Africa for the fund. It’s worth noting Bezos Expeditions is not connected to Jeff Bezo’s hallmark business venture, Amazon.
For Chipper Cash, the $30 million Series B raise caps an event-filled two years for the San Francisco-based payments company and founders Ham Serunjogi and Maijid Moujaled. The two came to America for academics, met in Iowa while studying at Grinnell College and ventured out to Silicon Valley for stints in big tech: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.
The startup call beckoned and after launching Chipper Cash in 2018, the duo convinced 500 Startups and Liquid 2 Ventures — co-founded by American football legend Joe Montana — to back their company with seed funds. The startup expanded into Nigeria and Southern Africa in 2019, entered a payments partnership with Visa in April and raised a $13.8 million Series A in June.
Chipper Cash founder Ham Serunjogi believes the backing of his company by a notable tech figure, such as Jeff Bezos (the world’s richest person), has benefits beyond his venture.
“It’s a big deal when a world class investor like Bezos or Ribbit goes out of their sweet spot to a new area where they previously haven’t done investments,” he said. “Ultimately, the winner of those things happening is the African tech ecosystem overall, as it will bring more investment from firms of that caliber to African startups.”
The company, which graduated from Y Combinator earlier this year, has recently raised $2 million from Signia Ventures and Sound Ventures for its predictive software, because sometimes businesses do need a weatherman to know which way the wind blows.
Atmo was founded by Johan Mathe, a former Google X employee who worked on Project Loon, the business unit focused on providing internet connectivity via floating balloons that would create a network of wireless coverage in emerging markets.
“I spent a lot of time working on weather,” said Mathe. It was his job to find ways for the balloons to navigate different areas and much of that navigation was complicated by weather patterns, he said.
“As I needed to build that there was so much complexity from the sheer amount of data with the weather,” Mathe said. “I thought I have to build something to make the intersection of weather and AI much more available for everyone.”
That was the beginning of a four year journey, which culminated in Atmo (formerly known as Froglabs.ai), the Berkeley, Calif.-based startup that’s providing predictive weather analysis for businesses ranging from renewable energy to ice cream shops.
Levy, who had co-founded the drug discovery company Atomwise, knew Mathe socially and initially invested in his company when it was just an idea. But as he saw the value in weather data and made the jump from investor and advisor to co-founder.
Now Mathe, Levy, and chief technology officer Jeremy Lequeux all work from Levy’s Berkeley house as they develop their software and take their company to the next level.
And recent events make the need for the company’s services abundantly transparent. Since 2019, climate-related events have cost the US roughly $89 billion, according to data compiled by the National Oceanic and Atmospheric Administration.
“Every business is on this weather spectrum,” said Levy. “Let’s say you just are an ice cream location. Degree to which it’s hot or cold will affect your sales 10%. We’ve worked towards creating a general purpose predictive system and takes weather data on one hand and all the historical weather collected around the world. It compares the two and analyzes how are all of your key business metrics affected by the weather.”
The company already has a half dozen customers including two billion-dollar businesses in the renewable energy and eCommerce and logistics industries, Levy said.
“One of the areas that we work on is risk and extreme weather, like how do you predict these fluke events that you have very little intervention around,” said Levy. “We make that kind of prediction separate and apart from how you can best optimize when things are in a relatively normal state.”
Demand is only going to increase as these extreme events become more common, because governments and businesses will be looking at ways to improve their ability to withstand or adapt to these catastrophic conditions. “There’s a need because everybody is talking about resilience these days,” said Levy. “I see Atmo as the company that’s going to provide these insights for the big companies that are concerned about this problem now.”
Post-pandemic China was supposed to be good for Fang Guobao. As lockdowns loosened and online shopping soared, the package courier in the eastern city of Nanjing was delivering about 250 parcels a day, up from 200 before the pandemic.
Then his paychecks stopped. His boss asked for more time twice. Then she stopped answering her phone.
So Mr. Fang and several colleagues resolved to stop working. Even though the outbreak had made jobs scarcer and willing workers more plentiful, they joined a string of other strikes and protests by couriers that is resonating through China and drawing greater attention to their low wages and grueling working conditions.
“You’re supposed to pay us. That’s only right and proper,” Mr. Fang, 50, said. “If there were no personal profit, who would want to be a part of this kind of thing?”
The unrest accelerated in the weeks before Singles’ Day, the online shopping event created by the e-commerce giant Alibaba, on Wednesday. The value of merchandise sold on Singles’ Day, which is like Black Friday and Cyber Monday rolled into one, is likely to shatter last year’s record $38.3 billion as China continues to rebound economically after bringing its coronavirus cases under control.
But the worker complaints leading up to it also suggest that, even as China has posted promising macroeconomic numbers, low-income workers in particular have continued to struggle. Express delivery orders of the kind Mr. Fang ferries have surged, buoyed by increased spending among the middle and upper classes. Yet that boom has not trickled down to the couriers, known as kuaidi, the mostly male and unskilled workers who zip around on electric bikes feeding the country’s online shopping obsession.
As a result, couriers are going missing and packages have gone astray. Workers in Hunan Province went on strike last month for more than $45,000 in back wages, leaving orders of hairy crab to rot in their boxes. In Shenyang, a city in the northeast, abandoned packages were dumped in an empty field last week. Internet users have joked that their packages are going on vacation, posting screenshots of tracking details that show their orders meandering across the country as they are redirected to functioning courier stations.
The hashtag “What do you think of the courier strikes?” has been viewed more than 1.5 billion times on Weibo, a Twitter-like platform, and was a trending topic on Wednesday.
Dissatisfaction is common in the courier industry, as are sporadic protests. But the courier strikes now, when the pandemic has left many other low-income workers unemployed, underscore both their dissatisfaction and their desperation.
The pandemic may have lent the strikes more public support, said Aidan Chau, a researcher at China Labor Bulletin, a Hong Kong-based labor rights organization. Many commenters on Weibo said they were willing to wait longer for their packages.
“After the coronavirus, everyone knows that workers are having a hard time now,” Mr. Chau said, adding that some people who had been in the formal economy had themselves been forced to pick up gig work.
Many of the workers, who are mostly men from rural areas seeking better jobs in the cities, are not employed directly by the country’s major shipping companies. Instead, they work for local franchises that help those companies complete the last mile of delivery. That model leaves many of the couriers — who numbered more than three million at the end of 2019, according to official statistics — without formal contracts and with few protections when disputes arise.
In addition, the major logistics companies have been locked since last year in a spiraling price war. The companies have tried to pass costs onto the franchises, who in turn have slashed the amount of money that couriers collect for each delivery, said Lin Chengyi, a professor at Insead, an international business school based in France, who has studied China’s gig economy.
Then came the virus. As cities locked down, many couriers were unable to work, and franchises struggled to stay afloat. Some folded. Those that did reopen struggled to pay couriers even reduced wages.
That was what happened to Mr. Fang in Nanjing. His local outlet of Best Express, one of the major delivery companies, did not issue $30,000 in wages to eight workers as promised. Mr. Fang said he was owed about $3,000, the equivalent of four or five months’ pay.
In July, the outlet owner promised to pay by August. August came and went.
So the eight couriers, just under half of the station’s employees, went on strike.
Not long after, their boss vanished. Mr. Fang tried complaining to a higher-up in the company, according to messages Mr. Fang shared with The New York Times. The company official responded that the dispute was not his responsibility.
After striking for a month, Mr. Fang decided to quit. He knew that it would be difficult to find a new job, but it was still better than being a courier.
“There’s no money, there’s no labor contract, and defending your rights is too difficult,” he said.
A spokeswoman for Best Express said the dispute over Mr. Fang’s wages had been “minor” and “swiftly resolved.” She denied that the company was experiencing strikes.
Others told nearly identical stories to Mr. Fang. A courier in Shanghai told the local news media last month that he had been hired just a week before to help deliver a half-month’s backlog of packages, after the franchise’s owner disappeared and the regular couriers quit. After another owner disappeared in the eastern city of Suzhou, couriers filed a police report to recover more than $15,000 in unpaid wages, so far to no avail.
Mr. Chau of China Labor Bulletin said that while workers may have endured a month or two of unpaid wages at first, given the pressures of the post-pandemic economy, that posture had probably become untenable as delays dragged on.
They have few other avenues for seeking help. The government has gradually moved to support workers in the exploding e-commerce industry, officially recognizing “online delivery person” as a new occupation in March. During last year’s National Day parade, delivery drivers led the way.
But legal protections remain scarce, given the couriers’ lack of employment contracts and the difficulty in enforcement across such a scattered network, said Tu Yongqian, a professor of labor law at Renmin University in Beijing.
The dispersed and high-turnover nature of the industry also means that there is little communication between couriers at different branches. Nor are independent labor unions allowed in China. So the strikes that have unfolded in recent months have occurred in isolation, as problems arise at each franchise.
“This group of workers is very big, but they’ve never had the strength to form into an organization,” Professor Tu said.
The lack of coordination has probably helped companies to deny that anything is amiss. Xinhua, the state-run news agency, published an article last month calling reports of strikes “fake,” with unnamed officials at each company declaring that operations were running normally.
Still, as demand peaked ahead of Singles’ Day, even the state news media acknowledged some bumps. China Central Television, the state broadcaster, aired a report on Tuesday about worker shortages at courier companies, though it did not mention strikes.
Even couriers who are not striking feel the ripple effects of others’ protests.
Chen Zhongqiao, a courier in Wuhan, dropped off a package at a checkpoint in September that has still not reached its customer. Workers further down the line had not acted on it for weeks, according to his tracking information.
Mr. Chen said he did not know whether he would be paid for completing his part of the order, but his hopes were not high. He had come to his current employer after the last one had disappeared.
“We’ll have to see whether this branch can hang on,” he said. “If this one also collapses and the boss leaves, then judging by previous experience I again won’t get any money.”
Liu Yi and Coral Yang contributed research.
LONDON — European Union regulators brought antitrust charges against Amazon on Tuesday, saying the online retail giant broke competition laws by unfairly using its size and access to data to harm smaller merchants who rely on the company to reach customers.
The European Commission, the executive branch of the 27-nation bloc, said Amazon had abused its dual role as both a retail store used by scores of vendors, and a merchant that sells its own competing goods on the platform. The authorities accused Amazon of harvesting nonpublic data from sellers who use its marketplace to spot popular products, then copy and sell them, often at a lower price.
“We must ensure that dual role platforms with market power, such as Amazon, do not distort competition,” Margrethe Vestager, the commission’s vice president for digital issues, said in a statement. “Data on the activity of third party sellers should not be used to the benefit of Amazon when it act as a competitor to these sellers.”
The case, which has been expected for months, is the latest front in a trans-Atlantic regulatory push against Amazon, Apple, Facebook and Google as the authorities in the United States and Europe take a more skeptical view of their business practices and dominance of the digital economy. Last month, the Justice Department brought antitrust charges against Google, and Apple and Facebook are also facing investigations in both Washington and Brussels.
Many in Europe will be watching to see how the Amazon announcement is received by the incoming administration of President-elect Joseph R. Biden Jr., who is expected to pursue policies that limit the industry’s power. The Trump administration has criticized Ms. Vestager for aiming at American companies like Apple, even as it initiated its own investigations of the industry.
In the Amazon case, the announcement on Tuesday is still preliminary and is just one part of the regulatory process. Amazon now has a chance to respond to the charges. It can take many months, or even years, before a fine and other penalties are announced. The commission also could reach a settlement with Amazon, or the case could be dropped.
The European Commission said it has also started a parallel investigation of Amazon policies around its “buy box,” an important piece of real estate on Amazon’s website that makes it easy for consumers to quickly click to make a purchase.
The commission is studying whether Amazon gives preferential treatment for the buy box to its own products and those of other sellers that pay to use Amazon’s logistics services.
Amazon denied any wrongdoing and said it supports thousands of businesses in Europe.
In Brussels, Amazon has been gearing up for a legal fight. It has hired a team of lawyers and economists, including several who in the past were encouraging tougher enforcement against Google and Microsoft.
“We disagree with the preliminary assertions of the European Commission and will continue to make every effort to ensure it has an accurate understanding of the facts,” the company said in a statement. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon.”
The case reinforces the European Union’s role as a leading tech-industry watchdog, even as past investigations of companies like Google have done little to diminish their power. Authorities in Brussels have argued that the biggest tech platforms unfairly use their power to box out competitors, though means like bundling products, charging high fees in app stores and hoarding data.
Ms. Vestager has raised alarms about the “gatekeeper” role of companies like Amazon, Apple, Facebook and Google. The companies have reached such a size, Ms. Vestager has argued, that they are essentially micro-economies, setting rules and policies with little transparency that determine the fate of millions of other businesses that have no choice but to follow along.
About 2.3 million third-party merchants around the world use Amazon to reach customers, including about 37 percent who rely on the company as their sole source of income, according to a United States congressional report published last month. In the European Union, Amazon has information on about 800,000 active sellers using its platform, covering more than 1 billion products, according to the European Commission.
Ms. Vestager has warned the biggest companies will only grow stronger without tougher antitrust enforcement and new regulations, blocking new companies and innovations from emerging.
Next month, the European Commission is expected to unveil a new package of laws that would represent one of the world’s most sweeping set of regulations of the tech industry. It could include rules prohibiting the self-preferencing of products and requiring the biggest companies to share data with smaller rivals.
In the Amazon case, European authorities spent two years investigating the company’s dual role as both a retail store and seller of its own goods.
Amazon argues that it only makes up a small sliver of the global retail market, but for many smaller merchants the company is the main gateway to online sales. Worries about Amazon’s power have only grown during the pandemic, as internet sales become increasingly vital to businesses grappling with lockdowns and lost foot traffic. Since 2015, e-commerce sales in the European Union nearly doubled to about 720 billon euros, or about $850 billion.
Sellers have long raised concerns that if Amazon sees a particular product doing well on its website, the company would create its own version, sell it at a lower price and then give it better placement on the Amazon website.
The European Commission said those concerns were supported by a review of data on more than 80 million transactions and 100 million products. Ms. Vestager said it showed how Amazon used the data from outside sellers to determine what computer accessories, kitchen tools or other products to introduce, as well as where to set prices and how to manage the inventory.
The real-time information Amazon collects includes order totals, number of visitors to certain products and a merchant’s revenue.
“This is a case about big data,” said Ms. Vestager. She said the investigation centers on Amazon’s behavior in France and Germany, where she said Amazon has a “dominant” position in the market.
Critics of Amazon cheered the European decision.
“Amazon, by using its very powerful position on e-commerce markets and its dual role as both retailer and marketplace, is making it more difficult for independent retailers to compete fairly,” said Agustin Reyna, director of legal and economic affairs at the European Consumer Organization, a group that has been urging regulators to act against Amazon.
Monika Pronczuk contributed reporting from Brussels.
PayPal this week laid out its vision for the future of its digital wallet platform and its PayPal and Venmo apps. During its third-quarter earnings on Monday, the company said it plans to roll out substantial changes to its mobile apps over the next year to integrate a range of new features including enhanced direct deposit, check cashing, budgeting tools, bill pay, crypto support, subscription management, buy now/pay later functionality, and all of Honey’s shopping tools.
While PayPal had spoken in the past about bringing Honey’s capabilities into PayPal, CEO Dan Schulman detailed the integrations PayPal has in store for the deal-finding platform it bought last year for $4 billion, as well as a time table for both this and the other app updates it has in store.
The Honey acquisition had brought 17 million monthly active users to PayPal. These users turned to Honey’s browser extension and mobile app to find the best savings on items they want to buy, track prices and more.
But today, the Honey experience still remains separate from PayPal itself. That’s something the company wants to change next year.
According to Schulman, the company’s apps will be updated to include Honey’s shopping tools like its Wish List feature that allows you to track items you want to buy, price monitoring tools that alert you to savings and price drops, plus its deals, coupons and rewards. These tools will become part of PayPal’s checkout solution itself.
That means the company will be able to track the customer from the initial deal-hunting phase where they’re indicating their interest in a certain product, target them with savings and offers, then guide them through its checkout experience all in one place.
PayPal will also provide “anonymous demand data” to merchants based on consumer engagement with Honey’s tools to help them drive sales, the company said.
What’s more, PayPal put timeline on the Honey integrations and the other updates it plans to roll out over the course of the next year.
Bill Pay will start to roll out this month, PayPal said, with a large redesign of the digital wallet experience expected for the first half of 2021. Much of the new functionality will be arriving in the second quarter and the second half of the year, with a goal of having the majority of the changes rolled out by the end of next year.
This also includes PayPal’s plans for cryptocurrencies, announced at the end of October. The company aims to support Bitcoin, Ethereum, Bitcoin Cash and Litecoin at first, initially in the U.S.
Speaking to investors during the earnings call, Schulman also noted when PayPal plans to bring crypto to more users and geographies. He said the ability to buy, sell and hold cryptocurrencies will first arrive in the U.S., then will roll out to international markets and the Venmo app in the first half of next year. (Currently, PayPal is offering U.S. users to join a waitlist for the new crypto features in-app).
This change will allow PayPal’s users to shop using cryptocurrencies across the company’s 28 million merchants without requiring additional integrations on merchants’ part. The company explained this is due to how it will handle the settlement process, where users will be able to instantaneously transfer crypto into fiat currency at a set rate when checking out with PayPal merchants.
“This solution will not involve any additional integrations, volatility risk or incremental transaction fees for either consumers or merchants, and will fundamentally bolster the utility of cryptocurrencies,” said Schulman. “This is just the beginning of the opportunities we see as we work hand in hand with regulators to accept new forms of digital currencies,” he added.
PayPal also recently joined the “buy now, pay later” race with its new “Pay in 4” installment program that lets consumers split purchases into 4 payments. This debuted in France ahead of its late August U.S. launch and has since rolled out to the U.K. (as Pay in 3). This too, will become more integrated into the company’s apps in the months ahead.
Venmo — which the company expects to reach $900 million in revenues next year — will see the expansion of business profiles, and will gain crypto capabilities, more basic financial tools and shopping tools, as well as a revamp of the “Pay with Venmo” checkout experience.
Schulman referred to the company’s plans to overhaul its Venmo and PayPal apps as a “fundamental transformation,” due to how much new functionality they will include as the changes roll out over the next year as well as the new user experience — basically, a redesign — that will allow people to move easily from one experience to the next instead of having to change apps or use a desktop browser, for example.
PayPal’s earnings hadn’t excited Wall St. investors this week, sending the stock down on its lack of 2021 guidance. But the year ahead for PayPal’s digital wallet apps looks to be an interesting one.
While the rest of the U.S. economy languished earlier this year, the tech industry’s biggest companies seemed immune to the downturn, surging as the country worked, learned and shopped from home.
On Thursday, as the economy is showing signs of improvement, Amazon, Apple, Alphabet and Facebook reported profits that highlighted how a recovery may provide another catalyst to help them generate a level of wealth that hasn’t been seen in a single industry in generations.
With an entrenched audience of users and the financial resources to press their leads in areas like cloud computing, e-commerce and digital advertising, the companies demonstrated again that economic malaise, upstart competitors and feisty antitrust regulators have had little impact on their bottom line.
Combined, the four companies reported a quarterly net profit of $38 billion.
Amazon reported record sales, and an almost 200 percent rise in profits, as the pandemic accelerated the transition to online shopping. Despite a boycott of its advertising over the summer, Facebook had another blockbuster quarter. Alphabet’s record quarterly net profit was up 59 percent, as marketers plowed money into advertisements for Google search and YouTube. And Apple’s sales rose even though the pandemic forced it to push back the iPhone 12’s release to October, in the current quarter.
On Tuesday, Microsoft, Amazon’s closest competitor in cloud computing, also reported its most profitable quarter, growing 30 percent from a year earlier.
“The scene that’s playing out fundamentally is that these tech stalwarts are gaining more market share by the day,” said Dan Ives, managing director of equity research at Wedbush Securities. “It’s ‘A Tale of Two Cities’ for this group of tech companies and everyone else.”
The results were strong despite increasing antitrust scrutiny from regulators. Last week, the Justice Department filed a lawsuit accusing Google of cementing the dominance of its search engine through anticompetitive agreements with device makers and mobile carriers. Facebook faces a possible antitrust case from the Federal Trade Commission.
The companies’ advantages are becoming more pronounced in an economy starting to dig out from the coronavirus pandemic. On Thursday, the Commerce Department said U.S. economic output grew 7.4 percent last quarter, the fastest pace on record, but remained below where it was in the last pre-pandemic quarter.
That slow return to health is also providing momentum to companies that suffered early in the pandemic, like Twitter, which reported on Thursday that revenue rose 14 percent in the third quarter as advertisers started to return. Twitter’s stock dropped about 14 percent in after-hours trading on Thursday, a reaction that analysts attributed to slow user growth.
Big Tech’s third-quarter boom could look modest when compared with the final quarter of the year. For Apple, it’s when consumers buy newly released iPhones. And the year-end shopping peak means lots of customers turning to Amazon for gifts, while advertisers rely on Google and Facebook for digital ads during the holidays.
The pandemic-fueled surge in online shopping pushed Amazon to a record for both sales and profits in the latest quarter.
Sales were $96.1 billion, up 37 percent from a year earlier, and profits rose to $6.3 billion.
The quarter did not include the usual boost from Prime Day, Amazon’s yearly deal bonanza, which was delayed to October. And the profit increased during a building boom, with Amazon expanding its fulfillment infrastructure by 50 percent this year. The company added almost 250,000 employees in the quarter, for the first time surpassing more than a million workers.
The lucrative Amazon Web Services division grew 29 percent as companies continued their shift to cloud computing.
Amazon said sales could reach $121 billion in the fourth quarter because of the confluence of Prime Day, the holiday shopping season and the turn to online spending.
The delay in the iPhone 12’s release meant Apple would face a tough comparison with the same quarter last year, which included sales of the iPhone 11. As a result, iPhone sales dropped more than 20 percent in the quarter.
Yet Apple’s overall sales still rose 1 percent to $64.7 billion, showing the increasing strength of other parts of the company’s business.
Apple’s services segment, which includes revenues from the App Store and offerings like Apple Music, increased 16 percent to $14.5 billion. Sales rose 46 percent for iPads, 29 percent for Mac computers and 21 percent for wearables.
Profits fell 7 percent to $12.7 billion, partly because the company spent more on research and development.
“There are lots going on here, and everything is going incredibly well,” Luca Maestri, Apple’s finance chief, said in an interview.
Facebook’s revenue for the third quarter rose 22 percent from a year earlier, to $21.2 billion, while profits jumped 29 percent to $7.84 billion. The results surpassed analysts’ estimates of $19.8 billion in revenue and profits of $5.53 billion, according to data provided by FactSet.
Facebook had strong results despite a wide-ranging boycott by advertisers this summer over issues of hate and toxic speech on the site. Though the grass-roots campaign, Stop Hate for Profit, rallied many of the top advertisers on Facebook to reduce their spending, the overall effects were brief.
The company continued gaining users as well. More than 1.82 billion people used the Facebook app every day, up 12 percent from a year earlier, it said. More than 2.54 billion people now use one or more of Facebook’s family of apps — Instagram, WhatsApp, Messenger or Facebook — daily, up 15 percent from a year earlier.
After its first-ever decline in quarterly revenue in the second quarter, Alphabet rebounded with its highest-ever profit. The strength came from across Google, with search advertising revenue growing 6 percent and YouTube ad spending rising 32 percent. Google’s cloud computing business grew 45 percent.
When advertisers slowed spending with Google this year as Covid-19 started to spread, Alphabet’s business took a significant hit. But as the economy has improved and businesses found their footing, advertisers have returned.
Alphabet posted a net profit of $11.25 billion in the third quarter as revenue rose 14 percent to $46.1 billion. Ruth Porat, Alphabet’s chief financial officer, said the improved profitability reflected efforts to cut costs during the economic downturn, including a hiring slowdown.