Jeff Bezos has announced he will stand down as chief executive of Amazon in the third quarter of 2021. The founder of the online retail behemoth will hand the reins to Andy Jassy, who currently leads Amazon’s cloud computing wing.
The announcement comes after an enormously successful 2020 for Amazon despite (or perhaps because of) the COVID-19 pandemic, with operating cashflow up 72% from the previous year to US$66.1 billion, and net sales increasing 35% to US$386.1 billion.
Amazon has its share of detractors, with critics highlighting concerns around working conditions, tax minimisation, anti-competitive practices and privacy. But its enormous size and continuing phenomenal growth make it a force to be reckoned with.
How did Amazon get to this position, and what does the future hold under new leadership?
How it all started
Almost 27 years ago, in 1994, Bezos left his job as a senior vice-president for a hedge fund and started an online bookstore in his garage. At the time, using the internet for retail was in its infancy.
Bezos decided that books were an ideal product to sell online. Originally the new business was named Cadabra, but Bezos soon changed it to Amazon and borrowed US$300,000 from his parents to get things off the ground.
Books proved popular with growing numbers of online buyers, and Bezos began to add other products and services to the Amazon inventory – most notably e-readers, tablets and other devices. Today Amazon predominantly makes its revenue through retail, web services and subscriptions.
The key to Amazon’s dominance has been constant expansion. After moving into e-readers and tablets, it extended more broadly into technology products and services.
The expansion has not yet stopped, and Amazon’s product lines now include media (books, DVDs, music), kitchen and dining wares, toys and games, fashion, beauty products, gourmet food and groceries, home improvement and gardening, sporting goods, medications and pharmaceuticals, financial services and more.
More general criticisms of the company culture have surfaced over the years, relating to insufficient work breaks, unrealistic demands, and annual “cullings” of the staff – referred to as “purposeful Darwinism”.
Another strand of criticism relates to Amazon’s market size and antitrust laws. Antitrust laws exist to stop big companies creating monopolies. Amazon presents a challenge, as it is a manufacturer, an online retailer, and a marketplace where other retailers can sell products to consumers.
Privacy concerns have also plagued Amazon products like Echo smart speakers, Ring home cameras, and Amazon One palm-scanning ID checkers.
Finally, the amount of company tax Amazon pays in Australia has been brought into question. The company has used a range of tactics to legally reduce the income taxes it pays around the world.
What does the future hold for Amazon in a post-COVID world?
What will change at Amazon when Bezos steps down? We’re unlikely to see a dramatic shift in the short term. For one thing, Bezos is not departing entirely – he will stay involved as “executive chairman”. For another, his successor, Andy Jassy, has been with Amazon since 1997.
Jassy is the head of Amazon Web Services (AWS) and already one of the most important people in the tech industry. AWS has been at the forefront of simplifying computing services, driving the cloud computing revolution and influencing how organisations purchase technology.
Jassy’s long history, intimate knowledge of the organisation, and technological expertise will no doubt stand Amazon in good stead.
However, he faces a monumental undertaking. Jassy will inherit responsibility for more than a million employees, selling millions of different products and services.
The physical lockdowns and online acceleration driven by the COVID-19 pandemic provided the ideal conditions for a company that has been called “the everything store”. Supporters and critics will watch with interest to see if this is still true in a post-COVID environment.
The link below is to an article that looks at the latest attempts at Amazon bashing and curbing the power of Amazon in the book industry. Don’t get me wrong here, monopolies are not necessarily a good thing in my opinion, however, has Amazon done anything illegal? I doubt it. Perhaps bookshops and bookstores need to change things up a bit – many still seem to refuse to mail order (I stress many, not all) for example.