Amazon (AMZN - Free Report) has acquired INLT, a startup which offers cloud solutions for importing goods, in a bid to strengthen online retail business.
Additionally, the move is in sync with the company’s strong focus toward enhancement of its cloud-based retail solutions offerings.
Notably, the startup helps sellers or businesses by lowering the cost of importing goods into the United States with the aid of its solutions. INLT develops software that helps in custom clearance and management of costs related to imported goods.
With the latest buyout, Amazon intends to simplify the process of cross-border shipments for the merchants on e-commerce platform. Moreover, the acquisition is likely to expand the company’s offerings to sellers.
Consequently, this will help Amazon in attracting more sellers to its platform and drive e-commerce growth, which in turn will drive the top line.
Dominance of E-commerce
We believe strengthening relationship with merchants on the back of enhanced tools and solutions offerings is anticipated to aid Amazon’s dominant position in the e-commerce space. This move will also provide the e-commerce giant a tough competition to other players which include Alibaba and eBay (EBAY - Free Report) , which are yet to offer such cloud services to merchants.
Growing Opportunities for Cloud in Trade
With INLT acquisition, Amazon makes a foray into cloud solutions in the global trade management space.
Cloud computing is making inroads in to the trade finance software space courtesy of the data driven world. Notably, the technology maximizes profitability by building strong trade finance architecture.
Moreover, cloud services offer high security controls and storage of data, which enables businesses to save on expensive IT investments. Additionally, these services help in seamless export and import management by bringing automation to the global trade process.
Importers are leveraging cloud services as they offer efficiency, lower risk and help in reduction of costs related to flow of documents and their verification. Meanwhile, exporters are adopting cloud technology as it ensures timely payment for delivered goods, consequently reducing the risk of payment fault from the buyer side.
We believe latest move of Amazon makes it well poised to capitalize on the burgeoning need for cloud in international trade.
Apart from Amazon, companies like SAP (SAP - Free Report) and Oracle (ORCL - Free Report) are taking strong initiatives to foray into global trade.
SAP Global Trade Services Software offers on-premise or cloud deployment, automates trade processes, control costs, management of free-trade agreement and accelerate cross-border supply chain. Further, the software helps in clearing the customs faster and reduces the risk of penalties and fines.
Oracle’s Global Trade Management Cloud manages all warehousing needs and transportation modes within and across borders to reduce costs, increases efficiency, and ensures compliance. It also helps in custom management.
Hence, competition is intensifying in the cloud solutions for global trade management space.
Nevertheless, Amazon’s aggressive acquisition strategy remains a key catalyst. Moreover, INLT’s strong customer base is likely to expand Amazon’s footprint in this particular space. Further, the e-commerce’s own huge seller base remains a tailwind.
Currently, Amazon carries a Zacks Ranks #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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