The second after Apple: what is behind the success of Amazon

How much money do you spend on purchases in the Amazon online store? Perhaps, much more than you think, judging by the company's latest report, published in early February.

Amazon's profit for the last quarter of 2017 was $ 2 billion, a record figure in the history of the online retailer.

This success is a direct result of Amazon's dominant position in online retail sales.

In the US, for example, for every dollar spent in e-commerce in 2017, 44 cents were spent on purchases at Amazon. The founder and owner of the company Jeff Bezos is the richest man in the world - his fortune reached $ 132 billion.

The largest market for the company remains the US, with Amazon not only engaged in virtual trading - last year it acquired the Whole Foods trading network for $ 13.7 billion.

How are things with Amazon outside the US?

Germany is the second largest market for Amazon after the US
Amazon is actively expanding its position in other developed countries. In Germany, for example, Amazon accounts for 25% of consumer spending in online retail. Between 2014 and 2016, the company doubled the number of product names on its German site and raised it to 229 million positions.

United Kingdom

Last year, Amazon received about 27 pence from every pound spent by the British on purchases. In the most recent annual report, Amazon points out that its incomes in Britain increased by 19% and reached $ 11.4 billion. Studies show that no other non-food retail chain earns in Britain as much as Amazon earns.

Japan

Among the largest markets of the company, Japan is the only country where Amazon does not take dominant positions. Although Amazon outperformed Rakuten as the largest e-commerce platform, its market share is "only" 20.2%, which is 0.1% more than the largest competitor.

China

China is the largest market in the world in the field of electronic commerce, and its growth rates are great. But Amazon's share in this country is only 1%. Chinese companies Alibaba (56.7%) and JD (27.2%) are much ahead of Amazon, conducting aggressive advertising campaigns and cutting prices. In fact, Amazon is not even among the five largest retail companies operating in China.

India

Amazon launched its first website in India in 2013, seeking to take advantage of the belated peak in the number of online sales. Despite the fact that according to the number of Internet users India ranks second in the world, e-commerce is still not widespread in this country. Only 14% of Indian Internet users regularly make purchases in online stores - in China, they are six times more.

Apparently, the strategy of Amazon was a success - in 2016 in urban areas Amazon ahead of the largest Indian company Flikpart. It controls 32% of the market, but Amazon's share is growing and is now 31.1%.

Africa

Amazon does not yet operate on the continent, although in South Africa the company provides services for virtual storage and data processing. Africans can order goods in Amazon, but only from foreign portals.

This provides a lot of opportunities for local trading companies. For example, the Nigerian Jumia was established in 2012 and currently operates in 14 African countries, and in 2016 was the first company in Africa, which is estimated at $ 1 billion.

However, a number of factors - from cultural traditions to difficulties with infrastructure development - limit the growth of e-commerce on the continent. By 2025, according to experts, the turnover of online retailers in Africa can reach 75 billion dollars. And in Europe in 2016 this figure was 650 billion.

Optimism, according to experts, inspires the rapid spread of mobile phones among Africans - on the continent more people have access to smartphones than to sources of drinking water.

Brazil

Amazon began to work in this largest country in Latin America since 2017, although before that it traded there only with books and electronics. It was reported that in early March, representatives of the company visited Brazil, where they negotiated with a number of manufacturers, who in future could become suppliers of the network. So far, sales in this country amounted to only $ 200 million in 2016, although the e-commerce market itself is estimated at $ 13.4 billion.

Spain

Amazon has been operating in Spain since 2011, where the company immediately offered the whole set of products, unlike other countries, where it usually started with the sale of books. The first logistics center opened in Spain in 2012. Prior to this, orders were made in other European countries. The e-commerce market in Spain is extremely fragmented - there are 9-10 large local companies operating there. Amazon accounted for about 8% in 2016.

Critical review

However, the company's success has repeatedly provoked criticism and criticism. Amazon has repeatedly been accused of carrying out an aggressive strategy in the field of competition, which led to the weakening and closing of competitors in the traditional sphere of trade. The company's policy in the field of labor relations has also often become the subject of public attention, and in Germany and Spain its employees have threatened to strike.

In addition, the European Union investigated the issue of Amazon's tax evasion, and last October the company was ordered to pay $ 293 million in taxes after the European Commission concluded that the company was able to conclude an unfair agreement with the Luxembourg authorities conditions of taxation.