The Amazon Effect

It's the early 90's, and the internet has just picked up a few years ago. At the age of 31, Jeff Bezos creates Amazon (or Cadabra initially) in 1995, when a mere 16 million people used the internet. Now, there are over 2 billion people on the internet, at least 1/3 of all people on the planet. Bezos understood that
internet would be the way to cross barriers and borders and connect people around the world. He understood that the internet was also a hub of information storage, and that he would be able to collect information on customers. In the 90's, paper books still constituted a large business. He understood the law too, and used the exemption in sales tax where Amazon was not physically located to avoid millions in state sales taxes, allowing him to compete with the big retailers. With companies likes Barnes and Nobles and Borders expanding their businesses, it seemed like Amazon wouldn't be able to compete.

Amazon survived the dot com bubble in late 90's and has been growing exponentially since. Amazon appealed to customers initially with free shipping. In the early 2000's, Amazon expanded from just a book marketplace to a marketplace for other goods from equipment to personal care products. As more and more people began to pay attention to Amazon, it created the Prime service in 2005. The have their own product line also: Amazon Basics. They have some great basic necessities online. Who knew Amazon would sell their own gel pens?

Before long, Amazon was dabbling in other affairs. It debuted Amazon Studios in 2010 to create shows, movies, etc. Over the years, it has developed successful shows. Now they have "Tom Clancy's Jack Ryan" coming out next year. Amazon Web Services is also a key part to its success, as it creates tools for business to use.

Amazon was able to pioneer and foresee the future. Bezos made risky, yet successful moves to ensure Amazon's presence in the 'information age'. With enough capital, Amazon was able to expand into technology with its Kindle, Kindle Fire, Kindle Fire Phone (one of Amazon's rare failures), and now Amazon Echo and Alexa.

20 years ago, there were 4000 bookstores; now there are less than 1900. Borders went bankrupt a few years ago in 2011, and now Barnes and Nobles is also struggling. 20 years ago, big companies like Walmart, Best Buy, Home Depot held on to their positions firmly. Now those companies are forced to adapt to the changing market to be able to compete. Amazon has taken an even bolder step by launching its own brick and mortar shops, challenging the traditional stores head-on.

Jeff Bezos was not afraid to let Amazon expand beyond it's original market. He embraced changing dynamics and thus was bale to capitalize them and secure a rise to power. Now it's developing Artificial Intelligence, putting itself at odds with almost every big company, from Microsoft to Google to Apple. Amazon has already stepped in front of others by having autonomous robots in operations and developing successful technology. The sad truth is that brick-and-mortar stores are facing a rude awakening. Let's be honest, it's so much easier to buy things online, where you can see reviews. You have a such a wide selection to choose from versus travelling between stores to find the right product. It's also significantly cheaper usually from Amazon because the middleman is cut out.

The only other competitor in its market now is Alibaba, its counterpart in Asia. It'll be interesting for those two companies to face each other, although for now it's clear Amazon is more powerful. Alibaba has taken great strides in the past decade, with its record-breaking largest global IPO ever in 2014. Amazon has created such a large shakeup that is impossible to ignore.

http://abcnews.go.com/Technology/amazon-bigger-walmart/story?id=32661220
https://www.forbes.com/sites/tompopomaronis/2017/08/04/jeff-bezos-amazon/#393926105c16\
https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/ryanmac/2014/09/22/alibaba-claims-title-for-largest-global-ipo-ever-with-extra-share-sales/&refURL=https://www.google.com/&referrer=https://www.google.com/