Photo by Steve Jurvetson, Licence: CC by 2.0
Amazon, quite simply, is an American e-commerce company that has erupted onto the global market in recent years, with its share price rocketing and customer base booming. Its founder Jeff Bezos has ensured that his brainchild has continued to be relevant in an ever changing market, and, as of today, Amazon not only survives, but thrives. Although other companies such as Alibaba have seen a rapidly depreciating share price, Amazon makes sure that its profits continue to soar and that it takes up an ever increasing market share, in a market that should be positively brimming with competition and fresh faces. It does this through a simple but ingenious business model, which has ensured itself a steadily growing base of regular users, who are willing to spend disposable income on items sold and marketed by Amazon.
Bezos, and indeed, Amazon, understand that they will not gain a substantial market share through a one-dimensional system of simply marketing items made by themselves and no one else. As such, they have added more depth to their business model and offered themselves as a medium for smaller sellers to sell their goods, with Amazon taking a cut of the profits. This ensures that Amazon gets revenue both from selling its own products and from taking small portions from small transactions. They have also entered themselves into the “used product” market, with some used products being more plentiful than brand new ones. Used products are almost always cheaper than brand new ones, and consequently Amazon has attracted the frugal users as well as the more lavish type. The three pronged system which has been described here makes sure that, if one part of their business fails for whatever reason, they have another two parts to fall back on, and a means to keeping the profits.
New, emerging technologies are something which does not pass Amazon by, and as such, Amazon have also used “Big Data” to their advantage. This manifests itself when one goes to the Amazon website, with products tailor made for the customer appearing on the front screen of the simple, sleek website. Items which the customer did not even know existed will be in the virtual shopping basket for delivery in a mere matter of minutes, which in turn leads to further customisation of the website to suit the interests of the customer. This effect ensures that people will keep coming to Amazon as a means to acquire the goods which they require, as they know that they can purchase them quickly, easily, and efficiently just by looking at the front page of Amazon. The company also realises the obvious drawbacks of online shopping, in that people cannot observe the product in real life, and so they counter this by having a review system, where users rate the product from 1 to 5 stars, with additional spaces for extra comments available. The customer can therefore see what other people thought of the product, and adjust, delete, or carry forward his or her purchase after seeing the reviews. This system ensures that Amazon has plugged the gap between online and real life shopping, which means that a great many people will prefer Amazon to do their shopping.
After seeing the success which Amazon has had in the UK, Bezos has realised that this is a formula which can deliver incredible success on a global scale, and therefore, Amazon has branched out into many different countries, including the obviously lucrative emerging markets. This is evidenced by the “Diwali Dhamaka” sale that the Amazon India site had in 2014, which left a great deal of Indians very impressed with the service as a whole, turning them into regular customers. Of course, Amazon would not want to miss out on Chinese sales, leading them to acquire Joyo.com in 2004, which was henceforth turned into Amazon China. The surging demand in China has recently led Amazon China to launch a whole new logistics service to accommodate for the aforementioned, indicative of the present success and the potential for growth which Amazon China has in later years. Another reason why Amazon appeals to so many different markets worldwide is its firm return policy, where people can return a product if they do not feel that it has matched up to their expectations, or if the product is broken, for example. This will logically increase customer satisfaction, meaning that more and more customers will return to use the Amazon service, even if one product which they have bought perhaps has underperformed. All of these factors in conjunction ensure than Amazon is, and will remain, an international superpower in the coming years.