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After stunning growth streak, Amazon ambitions seem boundless
By Julie CHARPENTRAT
San Francisco (AFP) Feb 18, 2018

Amazon: from online book seller to market shaker
San Francisco (AFP) Feb 18, 2018 - Amazon has grown from a humble beginning as an online bookseller to a colossus of the internet. It recently devoured Whole Foods Market, and is now biting into health care.

Here are some key facts about Amazon:

-- Incorporated in 1994 in Seattle, Washington, Amazon sold its first book in July 1995, with founder Jeff Bezos personally mailing packages to customers in the early days.

-- In 1999, Amazon went beyond books into gadgets, toys, electronics, software, home improvement and video games. A year later, it launched "Marketplace," allowing third parties to sell over the Amazon platform and has added new categories of merchandise and services over the years.

-- Amazon Web Services, launched in 2002 to be the online hosting platform for Amazon and its partners, has grown into one of the world's biggest cloud computing operators.

-- In 2005, the company launched Amazon Prime, a subscription service offering free delivery on many items and other benefits, representing an important element in the Amazon business model. No official figures are available, but some analysts say Prime has some 90 million subscribers in the US.

-- Amazon has expanded internationally, and operates as a retailer in Canada, Mexico, Britain, France, Germany, Japan, Italy, Spain, the Netherlands, Ireland, China, India and Australia.

- Music, games, food -

-- In 2007, Amazon Music launched as a platform for streaming songs, and later evolved into a cloud-based service.

-- Amazon made its first move into grocery delivery in 2007 with Amazon Fresh. It is now beginning deliveries through Whole Foods.

-- A rival to Netflix in video, Amazon offered both DVD rentals and streaming for several years before rebranding its service as Instant Video and later as Prime Video. It now has its own studios producing original programs and films, and won an Academy Award last year for "Manchester by the Sea."

-- Amazon waded into the booming world of video game play as spectator sport with the billion-dollar buy of eSports streaming platform Twitch in 2014.

- Amazon bought US grocery chain Whole Foods in a $13.7 billion deal announced in June of last year.

- Hardware, drones, video -

-- Amazon started making Kindle e-readers in 2007 and expanded its hardware to tablets with the Kindle Fire in 2011. A Fire smartphone launched in 2014 flopped, but Amazon continued in hardware with its voice-activated Echo speakers, igniting a market for voice-commanded home assistants powered by artificial intelligence. Amazon also produces Fire TV devices.

-- The first Amazon physical retail store opened in Seattle in 2015. A cashierless "Amazon Go" shop opened in its home city early this year uses technology to automatically bill customers for items they pick from shelves.

-- Amazon has been pushing for drone delivery for several years, launching its first project in Britain in 2016, saying regulatory obstacles were too great in the United States. Amazon also has its own aircraft and local delivery operators that avoid third parties.

-- Globally, Amazon had some 540,000 employees as of the end of last year, boosting employment in warehouses even as it installed thousands of robots. It has research operations for artificial intelligence, robotics, ad technology and related fields.

-- Amazon gained a reputation delivering little or no profits in its early years as it invested for growth. But for 2017 it posted a profit of $3 billion on $178 billion in revenue.

Triumphant in online retail, cloud computing, organic groceries, and streaming television, Amazon founder and chief disruptor Jeff Bezos is turning his seemingly limitless ambition to health care.

Amazon, launched as an internet bookseller nearly 24 years ago, has branched into offerings including voice-commanded speakers infused with Alexa artificial intelligence and original TV shows streamed online at its Prime subscription service.

Health care now appears ripe for Bezos, who has earned a reputation for attacking high costs and inefficiencies.

A possible step in that direction was taken last month, with Amazon announcing an alliance with billionaire Warren Buffett and JPMorgan Chase chief executive Jamie Dimon to provide a health care system for employees of the three companies.

According to the Wall Street Journal, Amazon would also like to become a supplier of medical equipment for hospitals.

"I think Bezos is methodical and thoughtful," eMarketer senior analyst Patricia Orsini told AFP.

"He has identified a market that is ready for disruption. The healthcare system in the US is ripe for reform."

Bezos faces the challenge of taming skyrocketing costs throughout US health care from insurance and medicine to supplies and therapy.

"Just as with every other industry Amazon has entered, Bezos is envisioning lower-priced alternatives with frictionless services that could, over time, make a lot of money for Amazon," Orsini said.

Barclays analysts said in a recent research note on Amazon's potential in health care, "We are never dismissive of anything disruptive that Amazon is involved in. Amazon arguable has the best technical abilities of any company we cover."

Amazon has been on a stunning growth streak of late, expanding its international retail operations as far as India and Australia, while devouring the US organic supermarket Whole Foods group.

With increased scale, it has been ramping up profits in recent quarters, helping Amazon leapfrog in market value to one of the top companies in the world and making Bezos the world's richest individual with a net worth well over $100 billion.



- Moving and shaking -

Amazon has repeatedly shaken up sectors with technology and efficiency.

With success has come leverage to pressure suppliers and manufacturers for better deals it can use to be the preferred venue for online shopping.

Standard & Poor's retail analyst Robert Shulz noted that Amazon has succeeded with a patient strategy of investing for the long term.

"Their approach is growing the business," Shulz said, even if some of the efforts don't yield a quick profit.

For years, Amazon invested heavily in distribution networks so it could get goods to buyers fast while controlling delivery costs.

A report surfaced this month that Amazon is preparing to test a delivery service that would compete directly with services like Fedex and UPS.

Amazon did not directly comment on the report but said, "We're always innovating and experimenting on behalf of customers and the businesses that sell and grow on Amazon to create faster lower-cost delivery choices."

Separately, Amazon this month unveiled plans to deliver groceries in a number of US cities for Prime subscribers using its recently acquired Whole Foods supermarket chain.

It is the first major effort to integrate Whole Foods -- a chain of 460 stores -- into Amazon's e-commerce effort.

- Ultimate disruptor -

Bezos, whose personal investments have included buying the Washington Post, has been referred to as the "ultimate disruptor" with a long-term view that only recently has begun to yield hefty profits.

Amazon recently reported its profits had more than doubled in the past quarter to $1.9 billion as revenue grew 38 percent to $60.5 billion.

But Amazon has been vilified for trampling on traditional practices at home and abroad. It also earned a reputation for high-pressure work conditions to minimize costs in warehouses, and a sometimes difficult corporate culture for executives.

Its search for a new "HQ2" or second headquarters meanwhile has set off an intense competition among cities desperate for the estimated $5 billion investment, drawing comparisons to the dystopian "Hunger Games" story.

Amazon's pattern of success has caused fear to ripple through sectors it eyes.

When Amazon last year made the surprise buy of Whole Foods, shares sank of major retail chains Wal-Mart and Target.

S&P Global Ratings said in a research note that Amazon "has brought price transparency and convenience to many retail segments," while shifting consumer expectations, thus creating problems for rivals.

"Legacy retailers are in various stages of adapting to the new landscape and not all have been successful," the analysts said.


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