Amazon: From bookseller to one of the most successful companies ever
BY María del Carmen Ramón
Some 27 years have been enough for Amazon, the online shopping giant and streaming company, to become one of the most successful businesses in the world.
The U.S. firm, officially founded on July 5, 1994, in Washington, under the leadership of the visionary Jeff Bezos, has revolutionized e-commerce in the West, and has had a major impact on the sale of e-books, music and streaming series.
According to the story, Bezos, one of the great pioneers in the era of the new economy, created the company with an initial investment of $10,000 and decided to make the leap to Wall Street two years later, with an initial market value of $300 million. His business strategy was based on reinvesting all the money earned in its own growth, so profits were practically zero until 2015.
With the exponential growth of Internet use in the United States, Amazon has expanded to the point of transforming the way consumers shop around the world. The numbers speak for themselves: the company closed 2020 with around $250 billion, and is currently close to $2 trillion U.S. dollars.
The reasons for this growth are linked to the diversification achieved. Amazon has about 600 physical stores, operated directly by the firm, several subsidiaries, and is entering the pharmaceutical, insurance and lending businesses.
Its great success was the launch in 2002 of Amazon Web Services (AWS), which made it the world leader in the cloud business. This represents almost 50 billion dollars a year for Amazon, and it is estimated that it can earn up to 25 billion dollars in digital marketing.
Amazon was also able to go further with promoting the opening of new highly profitable lines, such as Prime Video audiovisual productions and the AWS server business. According to company data, in 2020 it spent $11 billion on television programs, movies and music content.
One of the regions where Amazon has become strongest is North America. Analysts estimate that there are 150 million Prime subscribers in the United States, so most U.S. households have at least one Prime member.
However, on July 29, 2020, at a Congressional hearing, Jeff Bezos stated, “The retail market we participate in is extraordinarily large and competitive. Amazon accounts for less than 1% of the $25 trillion global retail market, and less than 4% of U.S. retail.”
According to Forbes magazine, the reality is that if Amazon, the big business that was born in a garage in Seattle a quarter of a century ago, continues with projected sales growth, it could have revenues in excess of 800 billion dollars by 2025.
Analysis published by Forbes, specialized in the world of finance and business, reveals that Amazon’s next challenge is to move into a new phase of growth: exploring other sources of income, having a presence in many markets (India, Latin America, Europe), expanding its footprint of physical stores, entering the health sector and food and beverage distribution, and reaching 300 million Amazon Prime customers by 2024.
