As the old saying goes, “Everything that goes up must come down”. That is exactly what has happened to Amazon, one of the world’s biggest E-commerce companies based in America. It was founded by Jeff Bezos in July 1994. Its products range from books, software to electronics, beauty products to toys and games.
How Big IS Amazon?
To simply answer this question, we only have to look at its rank and revenue. Amazon stands at 8th position in top ranked 500 American companies. 798000 people are employed with Amazon with a market capital over US$ 1 trillion. Isn’t it HUGE?? Amazon’s sales increased from 14.835 Billion to 232.887 Billion dollar in 2017 with total earnings of US$ 10.07 Billion. WOW! It’s more than the budget of a developing country.
It is usually seen that most of the companies face their downfalls after reaching their peaks. This sounds familiar, right? Research indicates that as companies gain confidence financially they tend to overlook the thin line between being confident and being over confident, they become ignorant to the quality of their products or services. They seem to lose focus on their competitors. They disregard the marketplace competition. These costly mistakes cost the flourishing business un-mountable losses leading to decline in sales, customers and services. Apparently this very thing appears to be happening with Amazon.
Loss of devoted Customers:
In this regard the statement of Amazon’s first CEO Grge Petro is highly significant. While talking to CNBC in 2018 he indicated that Amazon may be losing its mighty worth by claiming that he was worried “because of the vanishing image of Amazon. He might have not had a clue that this decline was going to surface so quickly. A survey shows that 55% of the respondents of a research prefer to shop from Walmart (a business rival of Amazon) rather than on Amazon. The number of the people who first preferred to shop from Amazon has now declined sharply from 53% to 45% in just 2018. Other research figures also support the theory of a vanishing Amazon image, these figures report that in 2017, 80% of the people who preferred to shop from Amazon initially, now are approaching other places for their shopping needs, reflecting a huge decline in Amazon’s growth rate.
Covid 19 Pandemic:
A report emerging in Forbes, suggests that in 2018, the percentage of Amazon consumers was 59 but in the year 2019, it lessened to a figure of 52%. Even one of Amazon’s CEO once discussed with his employees about delaying an inevitable downfall. It now seems that he was preparing himself for this day, a day that has come too soon. The current pandemic Covid 19 has not helped the situation too much in fact it only made matters worse. During this Covid 19 situation there became an overflow of orders placed by Amazon customers creating a situation which the team was unprepared to handle as they couldn’t manage to satisfy their customers timely and efficiently as they did previously; resulting in loss of huge chunks of customers. Even the face saving measures employed by the management like “July Prime Day Sale” could not assist them in any way.
Loss of employees:
The troubles of Amazon deteriorated with the emergence of this recent pandemic. The giant online book retailer had to spend 4$billion for the safety of their employees during the covid 19 pandemic. Even some reports hint at the fact that the retailer had to say goodbye to their many warehouse employees due to the virus due to which they couldn’t deliver products on time. It is no surprise that they needed some extra time to pack and parcel their goods, with fewer employees during the pandemic so they couldn’t do anything else but to clearly see their doom.
As, for now it has become evident as Jeff Bezos once said, “Amazon is not too big to fail” It will not take too long for Amazon to be forgotten for once and for all. But all of this raises a simple question? That is, how will the fate of the giant Amazon impact the entire world at large?
Doubtlessly, Amazon in actual changed the market of the world with its innovation but this is also a fact that every story either it is of success or doom, has both positive as well as negative effects and Amazon is no exception.
Let’s see what positives a diminished Amazon image can bring to the world?
The Threat to other companies is gone:
It was reported that Amazon gave tough time to 49 major companies around the world along with many others. It had become VIRTUALLY impossible to stop Amazon from taking over the world. Now that danger seems to be gone and those companies seem to be at ease.
Opportunity for traditional retailers:
Who can deny the fact that Amazon disturbed the traditional retail market and many jobs were lost due to shutting down of traditional markets.
SILVER opportunity for other online companies to fill the gap:
As indicated by market place surveys retail stores like Walmart are being preferred more nowadays. There has emerged an e market race among companies to win the customers over and big companies can fill this gap more easily.
A lesson for others:
Every failure gives a lesson, a chance to improve and this too is true for Amazon. It enjoyed 20+ years of success and now it is wearing off. Many small companies can learn from the mistakes that this company made.
Now coming towards the other side of the story, let’s put here some negative effects of its doom.
Loss to smaller businesses:
Amazon was known for helping more than 20,000 small and medium business set ups across the globe. With the downfall of Amazon all those companies will suffer too.
Loss of jobs:
Amazon created job opportunities not just locally but internationally. There were more than 750,000 workers in the warehouses of Amazon to pack and ship their parcels. Now, with a declining number of orders, they had to expel many of their employees empty handed.
Inflation may increase.
The prices of goods on Amazon were actually lower than other retailers and this gave them an urgency to lower their prices too but now as we are witnessing rising prices which may be affected by the Amazon crisis.
What would be the future of AMAZON?
The global population has spent a total of US$ 3.6 trillion in online purchasing this year alone which is 40 percent more than the previous year. It is forecasted that due to world lock-down due to the global pandemic the online purchasing will increase almost 200 percent by the end of 2020.
IS it good for Amazon?
Definitely! It’s an indication that the future belongs to Amazon as there are more than 60 percent goods form traditional business which are not sold online on Amazon YET. Services and digital products are also some domains on which Amazon has still not worked much on. But with the passage of time Amazon is working on adding all these domains in their services. Amazon has offered content-creators a platform to self-publish, distribute, and collect payments for their original works. Amazon already has the credit card services but along with this is now offering other payment methods which will further open up its access to more of the unexplored world.