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Challenges of Amazon

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Bezos, the world’s richest man, announced that he will step down as Amazon CEO in the third quarter of 2021, when the company’s performance reaches its peak. However, he will continue to serve as executive chairman and will continue to participate in Amazon’s important development plans, including the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions.  Because he is not really fully retired, there is no significant fluctuation in Amazon's stock price.  

Amazon report more than $100 billion in quarterly revenue for the first time in the fourth quarter of 2020.  Affected by the epidemic, online shopping has become the consumption norm.  Amazon is facing a lot of difficult problems when its global business is developing and prospering.  How Will Amazon Change with Jeff Bezos Handing Over the CEO Reins?

Needs to pay attention:

Who will replace Andy Jassy as CEO of Amazon Web Services (AWS)?

Jeff Bezos announced that new CEO of Amazon- Andy Jassy.  But who is going take over the CEO of AWS?  AWS is currently the highest market share of cloud service platform in the world, with a market share of 33%, compared with Microsoft’s Azure, which accounts for 18%, and Alphabet Holdings’ Google Cloud, which accounts for 9%.  The top five vendors have a market share of up to 80%, how can the people who lead the AWS department in the future increase the market share under such circumstances, it will also be a big challenge!

Antitrust litigation

Amazon's market share of the U.S. e-commerce retail market already holding a dominant position.  The European Union questioned that they abused online customer and merchant resources.  Collect and provide third-party seller sales data to Amazon’s own brand platform for development or sales services.  This has violated fair market competition and harmed the rights and interests of other sellers in fair competition; controlled all the fields of food, clothing, housing, transportation, and entertainment of consumers, and monopolized the market in all directions.  If the investigation is true, the fine will reach tens of billions of dollars. 

Labor Issue

after pandemic outbreak Amazon's online business became popular, and the number of employees recruited rapidly expanded to 1.3 million.  However, Amazon has not doing enough to prevent the epidemic from employees.  As many as 20,000 internal infections among employees.  Moreover, in order to improve work efficiency, the use of video equipment and wristbands to monitor the behavior of employees in the toilet; rumor of low wages squeeze the employees.   Nearly 6,000 Amazon warehouse workers in Alabama will vote on forming the first union in the company's history. 

Market Competition

Amazon’s market competition consists of two parts: 1. E-Commerce Business 2. Amazon Web Services

Amazon ranks first in the e-commerce business, but its share of the global market is still very small, only about 1.4% of global market sales.  Therefore, it is possible to expand the global market share, but cannot ignored the rise of small stores will divide up the share.

Although the Amazon Web Service ranks firmly in the first place and also the most profitable subsidiary of the company's system, it is still being challenged by other companies.  In the global market, the 3A pattern consisting of Amazon AWS, Microsoft Azure, and Ali Cloud.  But Amazon’s market share is squeezed by Microsoft and Alibaba Cloud.  The market share is decreasing year by year, and market competition is getting fiercer. 

Amazon is committed to creating long-term value without focusing on short-term benefits.  It continues to develop and invest in creation.  While Amazon faces challenges with rising competition across its business segments, how will Amazon continue to grow and successfully create over the long-term value to solidify the current market leadership position and work toward the future?  That’s keep tracking their business trends.

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