A Deep Look into the Growth of Amazon

Amazon is a multinational technology company that has dominated the e-commerce industry. Although Amazon is now one of the most recognizable brands in the world, the company started off as an online bookseller. In this article, I will dive into the history and growth of one of the world’s largest companies.

The Origins of Amazon

The concept of  Amazon was first formed in 1994 by Jeff Bezos. At the time, Bezos was a Wall Street hedge fund executive. As stated earlier, Bezos began Amazon as an online bookseller; however, Bezos had always planned to sell other products in the future. He chose to book online first because he believed that these items would be the easiest to sell online. Many doubted Bezos and felt that Amazon would not be able to generate much revenue and be outcompeted by companies like Barnes & Noble and Borders. They were wrong, however, as Amazon grew incredibly quickly, reaching 180,000 customer accounts by December 1996.

The main reason for Amazon’s success was its ability to gain customer loyalty. The website had personalization tools that recommend products to the consumers based on their purchasing history. The website also allowed customers to write reviews and provide ratings of the products, fostering a community amongst consumers. Over time, Amazon began to sell products other than books.

Bezos grew the company further by launching Amazon Web Services (AWS), a service that offers data on Internet traffic patterns and the popularity of websites. As time passed, this service started to be used for renting data storage over the Internet. Currently, Netflix uses AWS for its video streaming service, despite being a competitor of Amazon Prime Video.

Despite all of Amazon’s successes, there have naturally been a few hiccups along the way. For example, in 2014, Amazon released a “Fire Phone,” which failed to sell. Many felt that the screen was clunky and old. In May 2020, Amazon released a game called “Crucible.” They had worked on the game for five years and spent millions of dollars in development for it to ultimately perform incredibly poorly among its competitors. They dropped the game from stores in June 2020. In 2017, Amazon tried to create an online visual shopping platform called “Amazon Spark.” Unfortunately, very few individuals used the platform, so it did not take off. Another failed business venture in 2017 was “Instant Pickup.” With this service, customers could order snacks, drinks, and basic essentials from the Amazon app and then use a specific barcode to scan in these purchases at the designated pick-up center. Unfortunately, Amazon felt the service was not worth the money spent on it, so they discontinued it in 2018. Even the biggest companies fail sometimes.

Amazon Today

In 2020, Amazon generated $386 billion in revenue and reached a $ 1 trillion market cap, approaching $2 trillion soon. AWS has now achieved a 30% market share. From 2019 to 2021, Amazon gained 85 million users, and in 2022, Amazon amassed over 200 million Prime subscribers. Additionally, in that same year, it generated $470 billion in revenue, making it the third-largest company in the world in terms of revenue generation. AWS was responsible for exactly 13% of that revenue. Amazon achieved the success that it has now by constantly innovating and trying new things, despite its many failures.