Amazon with billions of profits: What can stop the company?

27.07.2018

Online company with billions of profits, but …
These are the (some) weak points of the Amazon

Amazon is now worth as much as the ten largest DAX companies combined. The US online giant continues to grow and has just exceeded the expectations of badysts: with $ 2.5 billion, the second quarter earnings are twice higher than expected.

With that, Amazon, all its long-time profits reinvested in growth, the series of profitable quarters continues. And that remains the case: CEO Jeff Bezos is expecting a profit of more than a billion euros for the three months to September.

Bezos proves that his strategy pays off. In North America online commerce, Amazon is the clear prevalence, but other business areas are flourishing. The Amazon Web Services (AWS) cloud provider has been particularly profitable. Amazon makes progress in the advertising business dominated by Facebook and Google

How can the company valued at nearly $ 900 billion stop?

"We still consider the Western and Asian world as too separate" which was a big German eBay reseller. So Amazon on the so-called "Prime Day", where he promotes special discounts, a few days ago estimated at 3 to 4 billion dollars implemented. "But the Alibaba online company has generated $ 25 billion in Chinese equivalent, Singles Day."

The powerful players in Asian e-commerce continue to grow. As announced a few days ago, the Tencent group is bringing its online shopping subsidiary JD.com to Germany and Europe. Competitor Alibaba remains cautious, but is expanding its storage capacity in Europe.

Companies follow the wrong road

According to Steier, Facebook and Google could be uncomfortable for the Amazon market. "Both companies are in the region until now rudimentary, but they could develop the business."

The Hamburg e-commerce expert and founder Alexander Graf sees the biggest threat to Amazon in another point: "You must realize"

Up here, Amazon has been such a success because that the company is run by a founder who takes risks – such as the deployment of the cloud business, which in 2006 has nothing to do with the current business model, had to do. "Companies like Yahoo or AOL have become too slow to take over as managers who have avoided expensive bets. "

According to Graf, many companies mistakenly think:" It's not about developing strategies against Amazon now. How they can offer a revolutionary experience to their customers and, if in doubt, spend a few years investing in this idea and accepting losses. "

Other competitors are closer to the customer

It was now time to attack the second generation of e-commerce users. Amazon is strong on the desk. "In the future, however, voice controlled orders or augmented reality solutions are conceivable."

Amazon still benefits from the fact that he has direct access to the customer. "It must not be lost," says Graf. He already sees other companies that manage to get even closer to their customers. For example, the Wish shopping application, which sells extremely cheap clothes, electronics or furnishings. "With personalized push notifications and emails, Wish has contacted his customers very aggressively," says Graf. "And they manage to turn them into purchases that they had not even expected." Because of the low prices on Wish's customers, they would no longer make comparisons.

Graf does not believe at the time that Amazon may have problems: "This can still grow for ten years."