Economy

Amazon– Taking Over the World?

Whenever anyone wants to shop or think about buying something, the first place anyone ends up is on Amazon, be it to check the price of the product or to purchase the product. Amazon has so many types of goods and services that it is almost too easy to become addicted. Amazon meets all their customers needs– music (Amazon music), movies (Amazon Prime Video), faster delivery (Prime Now) etc. Amazon works because it has capitalised on this generation lifestyle. Our generation prefers speed and conveniences. A lot of people prefer to purchase a product from the comfort of their bed over an electronic device and have it delivered to them, rather than go out and purchase this product in a physical market. It is a faster process and frees time for people to focus on other things of interest. Now, there are other companies who work like Amazon too like Flipkart, Snapdeal etc. but Amazon is the best player in the field of E-commerce by offering the most services and it is extremely easy to use.

Amazon is essentially taking over the world and its all because of one man, Jeff Bezos. Jeff Bezos is one of the richest men in the world. He has a net worth of a hundred billion dollars. He is a visionary and under his leadership Amazon has grown. What started as a book store has grown and expanded to all services attracting a high percentage of E-commerce. Amazon has also invested in a wide varieties of business organisations and is increasing its presence in every area of the economy. Amazon has a stake in apparel, household items, pharmaceuticals and many more. The company also has the financial leverage to take it to places that cannot be reached by their competition.

Amazon has always prioritized growth over profits and are quite willing to lose money, if it means becoming the leader of the market share. Amazon went public in 1997 and Wall Street largely accepted losses and razor-thin profits quarter after quarter with the expectation that Amazon would ultimately be a good bet. It has been: Amazon’s stock price has multiplied five times over in the past five years, and it saw $1.9 billion in profits in the last three months of 2017 alone.

The more Amazon grows the greater are its chances of becoming a monopoly. Monopolies are quite bad for the economy. When a company has become too dominant in the market, it can control market behaviour, fix prices, and remove competition. When there is limited competition, organisation has no incentives to become better. Amazon determination to catch market share and undercut profits for the sake of growth is a main factor in allowing the company to reach a monopoly status.

Since Amazon is essentially a market, it sells products of different types of brands. This allows the organisation to identify and understand which products are doing well and why. The company then uses this information to either market similar products or buy out those firms and thus increase their market share and thus further enabling them in becoming a possible monopoly. If Amazon keeps practising this, it is possible that amazon will eventually cut out all competition and Amazon would become the only place for people to shop. Once this happens Amazon can charge whatever they choose and make large scale profits. Amazon is practicing delayed gratification to give consumers instant gratification by allowing them to purchase the best products at the best prices so that people would keep retaining the services of amazon over any other E-commerce website.

Amazon also has massive understanding of its consumers data. Unlike other websites like Facebook who track their consumers web searchers to display appropriate advertisements, Amazon knows exactly what its consumers want because of the purchases their consumers make on the website. For this very reason, amazon has vendors, politicians, Wall Street, all hooked on to the daily operations the organisation and attempt to make various business transactions with this website in order to be able to use Amazon data.

Therefore it can be understood that Amazon is a big player in the E-commerce and global world. Now, there is a cost on bigness, a big business organisation has the possibility to influence people. For Instance; Facebook which started as a small social media website , could have had a big role in swaying the USA presidential elections. It is therefore important to constantly regulate these big companies and keep updating law and regulations for the digital age so that no company has an influence on human behaviour. Considering the pace of Amazon’s growth and their determination to gain market share, it is very possible that it might become the only shopping destination for people all over the world. It already has a large presence in all sectors of the economy and there is no stopping its advancement. The only way this can be curbed is if governments are able to implement laws and successfully regulate the organisation thus preventing it from taking over the world.

Picture Credits : www.aljazeera.com



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