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Although Amazon was small 10 years ago, it is transforming into stable growth in internet shopping malls in 2010, when sales grew by 40% compared to the previous year. It was in the second half of 2010 that TV and film production studios were established, and it was at this time that Amazon stocks grew rapidly.
Jeff Bezos became the richest man in the world on this uptrend, but after divorce, he gave up a quarter of his stake to his ex-wife, leaving him in second place. Anyway, if you invested $1,000 in Amazon 10 years ago, you would have had an amazing 1,232% return by now at $13,300.
Amazon now has online distribution and cloud in its hands. Ten years ago, Amazon was an EC store. Amazon Prime, which offers free shipping after a banquet, has been around since 2005, but products eligible for free shipping on two days were limited, and Amazon Prime Video also felt like a fan club where only people who liked Amazon gathered. The annual fee was 80 dollars in 2010. However, Amazon Prime has been a catalyst for explosive growth, and Amazon’s market cap has grown from $60 billion to $970 billion. The Amazon Prime annual fee in the U.S. is currently $120, giving Amazon a basic income of $12 per month.
Amazon Prime members currently have 100 million members, which is comparable to the 14th country in the world. When Amazon made money, it returned as an investment to report deductions or postpone after accounting for the deficit for seven years since its inception. In 2018, they even received a $1 billion tax refund without paying any corporate income tax. 3% annually. It is an 18% difference from Wal-Mart, which sincerely imposes a 21% legal tax rate.
Amazon is also diversifying its products. Of course, the scarier thing is sleeve destruction. Bookstores disappear and toy stores disappear in American cities. The same goes for large discount stores. Shutters are down in shopping malls that once flourished. The actual store became a showroom to check prices. Even Macy’s department store, which is said to be the prince of retail, is falling from a record high of $69 per share in July 2015 to $16 in five years.
While Amazon deals with third-party products on the Internet, it is also competing for its own brand. The operating side is overwhelmingly advantageous as it can recommend the desired product based on individual consumption data. It has been accused of using this algorithm to create affiliated brands that are similar to popular brands and rank them at the top in search and recommendation, and the Federal Trade Commission FTC is investigating Amazon for antitrust charges. If the violation is confirmed, the scale of the disposition is unknown, but the fine paid to the FTC in 2019 by Facebook for violating privacy was a record high of $5 billion.
Democratic candidate Elizabeth Warren is pledged to split GAFA (Google, Apple, Facebook, Amazon). But Amazon is putting money on lobbying, and more than 100 lobbyists are working for Amazon. Amazon is also actively participating in public projects. It is said that the planned map for the 2nd headquarters is 15 minutes by car from Washington DC, where business transactions ordered by the government take place. It is evaluated that the likelihood that the government will move toward the Amazon division is low due to this deep relationship with government agencies.
Amazon occupies 40% of the e-commerce market. AWS topped the market share in 2018. As of 2018, the Kindle accounted for 84% of e-books, and Zappos ranked first in sales of shoes and clothing in 2018. Amazon’s logistics network is stored across 175 locations around the world, and the delivery site is 4.22 million pyeong. The Amazon Flex delivery contract network, which also travels by route, land and by car, continues to grow. Amazon is also positioning itself as a disruptor of logistics. This is why I am curious about the future of Amazon.
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