Monday 25 January 2021
$600,000 per minute. That is how much revenue Amazon makes. Over the past ten years it has grown its revenue from $27 billion to $347 billion. Not only is it the #1 player in eCommerce but it is the world’s largest cloud service provider. This article makes the case that this is just the beginning. Amazon may be well on its way to becoming a multi-trillion dollar conglomerate.
Perhaps the next industry to face the full weight of the ‘Amazon effect’ is pharmaceuticals. Amazon acquired PillPack, an online pharmacy, in 2018 for $753 million and pharmacy stocks fell 10% on the news. Once it dominates the online retail space, there are suggestions that Amazon could try and do what it did to retailers with ‘Amazon basics’. Challenge the profit margins of other retail and consumer goods brands by creating lines of own brand essentials. It may look to do something similar with generic drugs in the pharmaceutical space.
At the same time Amazon is pushing hard into space. Similar to Elon Musk’s plans at SpaceX, Amazon is looking to deploy satellites into low earth orbit to provide wireless broadband around the world. At the same time, Bezos’ space venture Blue Origin is looking to compete with Richard Branson’s Virgin Galactic and offer space tourism in the coming years.
Finally (for this write up, not for Amazon’s ambitions), Amazon is pushing into the auto industry with the acquisition of self-driving start up Zoox (co-founded by Australian Tim Kentley-Klay). Amazon acquired the start up for $1.2 billion last year and the company has just revealed its first product, a “full automous, bi-directional, electric robo-taxi with 16 hours of drive time” set to launch in 2022.
The scale of Amazon’s ambitions are pretty startling. With the scale of its eCommerce business and the high margins on Amazon web services, it is setting itself up to enter new industries and disrupt incumbents for years to come. We’re excited to see if they can live up to their own lofty ambitions.