In one sense, their expectations were exceeded, with the news that the company had generated a spectacular $125.56 billion in sales, fueled by the continuing stay-at-home orders as a result of the pandemic.
However, despite the impressive results, the headline news from the call wasn’t the numbers, but the announcement that Jeff Bezos was stepping down from his role as CEO to be replaced by Amazon Web Services‘ CEO, Andy Jassy.
A follow-up piece in the Financial Times gave some insights into why the move was happening and what we can expect next from one of the world’s richest men.
A former product manager told the paper that, like fellow tech entrepreneur Elon Musk, Bezos is planning to focus his efforts on enabling space exploration. According to the insider: “The race to space is less complicated, from a regulatory perspective, than a lot of the stuff he’s dealing with right now.”
A messy legacy
Given the legacy that Bezos is leading for his successor, the latter would have every right to feel a little peeved. Interspersed between the headlines about Bezos stepping down, the Google search results yield a litany of issues and incidents involving workers’ rights and the ongoing antitrust suits against Amazon.
For instance, one story details the fact that the company has started installing cameras in delivery vans that record continuous footage of drivers, ostensibly in the spirit of keeping drivers safe. However, infractions such as hard braking, driver distraction, or even a yawn mean that the AI-enabled cameras will upload footage to the company’s servers.
Elsewhere, the US Federal Trade Commission recently levied a $61.7 million fine after it discovered the company was failing to pay customer tips to delivery drivers, instead choosing to withhold the funds.
Perhaps even more worryingly for Andy Jassy, Amazon is currently facing down an antitrust lawsuit in the European Union, and it looks as if US regulators could be next. The company stands accused of having gained an unfair competitive advantage over its rivals. As a marketplace, thousands or even millions of vendors rely on Amazon’s services to ply their trade. However, the company also sells its own products.
The antitrust filings allege that Amazon has been using its algorithms to push its proprietary goods to the top of the list of products a user sees when searching for any given item.
New choices for merchants
The fact it’s taken so long for this unfair competition issue to come to regulators’ attention must be galling if you’re a merchant dependent on Amazon to earn a living.
But where else are merchants supposed to go when Amazon has a stranglehold on the market? Selling via your own website means having to go to all the effort to set it up and actively reach customers. The ease of going to market is supposed to be the main attraction of Amazon.
There are a few other options on the market. Big platforms such as eBay and Etsy offer an alternative. However, competitors are also beginning to emerge as legitimate rivals, and like eBay and Etsy, don’t come with the risk of competing against their own sellers.
In Europe, UK-based OnBuy is currently undergoing a rapid expansion, proving that it’s not just Amazon undergoing an e-commerce boom as a result of shoppers moving online. With their expansion into 140 new countries over the next two years underway, the company achieved growth of 605% in 2020 and started 2021 with 800% year-on-year growth in January.
Similarly, Latin America’s Mercado Libre doubled its own value in 2020, now worth $63 billion. In general, the pandemic has accelerated e-commerce adoption by anything between three and ten years, to the benefit of all participants, not just Amazon.
Interestingly, incoming Amazon CEO Andy Jassy comes from the firm’s web services arm, so he will be a fresh pair of eyes on Amazon’s e-commerce operations. Perhaps he’ll provide a much-needed shakeup for the company, taking a new stance on workers’ rights and fair competition with sellers. It may be no bad thing for Amazon in the long run if it helps the firm protect its market leader status against the onslaught of new competitors.
However, if Jassy chooses to preserve the legacy of his predecessor amid ongoing lawsuits and regulatory concerns, the e-commerce market could end up looking very different in the coming years.
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