Online shopping has become a part of the daily life for most us today. As per Statista, over 2.1 billion people worldwide will go for online shopping of goods and services by 2021. While the number of e-commerce companies worldwide is growing fast, there are a few pioneer companies that has established itself as the market leader in the sector, and one of them is Amazon. Started in the year 1994 from the founder Jeff Bezos' garage, Amazon is one of the few companies that joined the 1 trillion valuation club. Let's have a look into the journey of this e-commerce giant.
Amazon – Company Highlights
|Headquarters||Seattle, Washington (USA)|
|Parent Organization||Amazon.com, Inc.|
Amazon.com, Inc was launched in 1994 by Jeff Bezos in the United States. Later, it stepped into other countries to increase its market. Amazon India was started in June 2013, and sooner it became the best e-commerce platform in India. Initially, the company started with selling books and it expanded to sell electronics, households, software, food, jewelry, and a lot more.
Currently, other than being an e-commerce company, Amazon has diversified into a number of domains including cloud computing, Publishing, on-demand music and video streaming, AI, consumer electronics etc and the company is constantly on a lookout to enter new segments. Amazon Studios, Amazon Publishing, Amazon Music, and Amazon Web Services are some of its other subsidiaries. In its bid to grow, Amazon has acquired over 100 companies till date.
Amazon - Founder & Team
Amazon was founded by Jeff Bezos (Jeffrey Preston Bezos) in 1994. He is an American entrepreneur and industrialist. After graduating from Princeton University with a degree in electrical engineering and computer science in 1986, Bezos worked for 'Fitel' ( a fin tech telecommunication startup), where he was working on building a network for international trade. Later Bezos was promoted to head of development and director of customer service at 'Fitel'. From 1988 to 1990, Bezos worked with 'Bankers Trust' (an American Banking Organization )as a product manager. In 1990, Bezos joined D.E Shaw and Co. a hedge fund, and worked there till 1994. In 1994, Jeff Bezos began his entrepreneurial journey, and started an online book selling company form the garage of his house, which today has turned out to be the world's largest online marketplace - Amazon. Interestingly Jeff Bezos also founded Blue Origin, a company for aerospace manufacturing in 2000.
Amazon India currently operates with three directors. They are Perinchery Vasudevanraman Elayath, Atul Jain, and Ashish Jain. Perinchery Vasudevanraman Elayath has been on board for more than six years. Atul Jain and Ashish Jain have been appointed in November 2015. Amazon India has more than 50,000 employees in India, in which around 30,000 comprises of warehouse employees and delivery boys. The company has around 8,40,000 employees worldwide.
Amazon - History
Jeff Bezos jokingly describes founding Amazon as a 'Regret Minimization Framework'. Jeff did not want to regret for not taking advantage of the internet boom that had then started to slowly take the world by storm. Hence in 1994, Jeff left his job as vice president of D.E Shaw & Co. to start his own venture.
Jeff Bezos wrote his company's first business plan on a cross country drive from New York to Seattle. Initially Amazon was registered as Cadabra, Inc. However, when Jeff found out that people misheard the name Cadabra as 'cadaver' (cadaver means corpse), he decided to change the name and bought the domain name relentless.com, but that too was changed as his friends did not quite liked the name and finally named his company as 'Amazon'.
Jeff listed 20 products that can be sold online, out of which he decided to start with selling books. The first to invest on Amazon were Jeff Bezos' parents, who invested $250,000 on the venture. By 1997, Amazon had 2.5 million titles. In 1998, Amazon acquired Junglee corporation ( provider of database technology to help consumers find products on the Internet) and 'Planet All' a social networking, calendaring and address book site, and with it the company also started expanding its offerings beyond books.
In 2005 Amazon also entered the crowd-sourcing business with 'Amazon Mechanical Turk'.
In 2006, Amazon entered the cloud computing sector with 'Amazon Web Services' (AWS) realizing the great scope that the sector holds.
In November 2007, Amazon released Kindle, its first e-reader, which became quite popular among the users. In 2007, Amazon launched Amazon Music. In 2006, Amazon entered into the video on demand sector with 'Amazon Unbox'.
Another Amazon product that has gained popularity is 'Alexa', which is a virtual assistant AI technology developed by Amazon.
Amazon - Name & Logo
Amazon being the largest river in the world, the company was named 'Amazon' as Jeff Bezos envisioned his company to be the largest.
Amazon's current logo which the company has been using since the year 2000, has and arrow leading from A to Z, which reflects the company's goal to provide every product a customer needs. The arrow forms a smile, which represents customer satisfaction.
Amazon - Revenue
What started as a small online book store, today is the world's largest online marketplace. In 2018, Amazon's annual revenue was $232.887 Billion, while in 2019, the company's revenue increased by 20.45% to reach $280.522 Billion. The company's net profit in 2019 was over $ 11.5 billion. In the first quarter of 2020, ending March 31st 2020, Amazon reported $75.452 Billion revenue.
Amazon - Funding & Investors
The company has received a total funding amount of $108 million over two rounds. Amazon went public in 1997.
|June 1996||Series A||$8M||Kleiner Perkins|
|July 2001||Funding Round||$100M||-|
Amazon - Revenue Model
A major portion of Amazon's revenue comes from its e-commerce business. Besides, Amazon also has 526 brick and mortar retail outlets, which forms a good source of revenue. It also makes a huge revenue through Kindle, an electronic device to read books, subscription fee of ‘Amazon Prime’, third party seller services, advertising revenues and revenue from Amazon Web Services.
Amazon - Competitors
Amazon has a lot of competitors in segments such as merchandise, web services, electronics, and media. Flipkart, eBay, Netflix, Google, Microsoft, Alibaba Group, Apple, and Oracle are some of the main competitors of Amazon in its different fields.
Amazon - Future Plans
Amazon plans to expand in the areas of Machine Learning, Home Automation, Robotics, and Space Exploration (termed 'MARS').
Till date Amazon has over 26 staff free and check out free Amazon Go stores across US. The company has tied up with Hyundai to make world's first cashier free department store in South Korea.
Amazon is also planning to venture into health- tech and food delivery business soon. Amazon CEO Jeff Bezos has revealed plans to introduce 'Amazon Prime Air Drone Delivery Service' , whereby lighter packages will be delivered to customers trough drones. The company is also making efforts to make its delivery system more eco-friendly, by including electric vehicles for its delivery services.
Regarding Amazon's plan in India, the company is planning to create 1 million new jobs in India by 2025. On January 2020, Jeff Bezos announced that Amazon will invest $1 billion in India to help 10 million traders and MSMEs in India to go online. The company is envisioning to enable exports worth $10 billion via Amazon by 2025.