Is Amazon taking over the world?
Space, not sky, is the limit
Love it or loathe it, Amazon has spearheaded a retail revolution by putting virtually anything you could want just a few mouse clicks away.
But the US giant caused shockwaves last week when it revealed a near-£11billion deal to buy Whole Foods. The upmarket grocery chain has 460 stores worldwide, with nine in the UK.
Amazon’s share price surged on the news, taking founder Jeff Bezos another step closer to becoming the world’s richest man.
But shares in Tesco and Sainsbury’s slumped amid speculation Amazon would use the stores for an assault on the grocery market.
If it does, the move is in line with Bezos’s vision of Amazon becoming the Everything Store.
He launched the firm 22 years ago from the garage of his rented home in Seattle, using £7,800 of his own money.
Its first two desks were made from doors bought from a DIY store to save money. Sentimentally, the boardroom still features six door-desks.
Amazon started off selling books online and the site was nearly called Cadabra. It is virtually seen as the fourth utility in the US now, after water, gas and electricity.
Reports say more than half of US households subscribe to its Prime service. A UK spokesman would say only that Prime customer numbers ran into the “millions” here.
Britain is one of its biggest markets and its website stocks 250million-plus products. Along with food, the big growth areas has been fashion.
Again, it started off selling other fashion brands but earlier this year introduced its own-label UK fashion range, Find. When it started, Amazon relied on delivery firms but it has built up a vast delivery arm, with its own planes and couriers who compete for work. In video, it began buying content from big movie studios but now commissions its own shows. Its streaming business spends £3.5billion a year on original content – more than all the Hollywood studios combined.
Amazon notably splashed out to sign ex-Top Gear trio Jeremy Clarkson, James May and Richard Hammond for The Grand Tour.
Northern Trust analyst Neil Campling said: “It’s about buying parts of the chain they don’t already own.”
The next step is ditching drivers and using drones to deliver items. A site in Cambridge is testing them. There has even been talk of doing away with warehouses and using giant airship depots. But Amazon’s expansion has led to criticism. Many blame it, and other online-only firms, for a wave of shop closures on the high street. Amazon insists it accounts for less than 2.5% of UK sales. But opponents have seized on its corporate structure, under which UK sales flow through Luxembourg. The company has since made changes but is still blasted by those who say it has an unfair advantage over physical stores. Amazon was also rocked in 2015 by claims of long hours and a highpressure environment. The firm, set to employ 24,000 here this year, denied this. Phil Dorrell, of Retail Remedy, said Amazon’s business approach is “genius”, adding: “It is up to others to step up and change, otherwise many will be doomed.” With sales of £100billion last year, Amazon is taking over the world – but Bezos’s ambitions go beyond that. He is selling £800million of shares a year to fund Blue Origin, which aims to launch 11-minute space rides from next year. A plaque in Amazon’s Seattle HQ reads: “There is so much stuff that is yet to be invented.” The message from Bezos is a rallying cry to staff. But given its already colossal power, it is hard to imagine what “stuff ” it will be selling in future – on this planet and beyond.