AMAZON- THE GROWTH STORY

BUSINESS, World Affairs
Year Milestone
1994 Jeff Bezos quits his job, launches Amazon.  Initial startup capital- his parent’s personal savings
1995 Amazon.com goes online with book sales. Bezos raises an $8 Million round of funding from Kleiner Perkins
1997 Amazon goes public at $18 per share
1999 Bezos named Time Magazine’s “Person of the Year” for popularising online shopping.
2009 Bezos acquires Zappos through  stock swap
2013 Bezos acquires the Washington Post
2015 Amazon surpasses Walmart as the most valuable retailer in the United States
2016 Becomes the fourth most valuable public company, goes offline with its first bookstore in Seattle
2017 Amazon acquires Dubai-based Souq.com, Bezos becomes the second richest person in the world

Amazon founder Jeff Bezos became the second richest person in the world, moving ahead of when Amazon acquired on 29 March acquired Middle East’s largest online retailer, Souq.com. According to Bloomberg, Bezos added around $1.5 billion to his fortune (now at $75.6 billion) as his company’s share rose to $18.35 billion as of  29 March.

From Bezos’ garage to becoming the world’s largest online retailer, here is a quick overview the incredible journey of the company.

From The Start

The year was 1994 when Bezos read a statistic that in the spring of 1994 web usage grew at 2300 percent.  This gave him the idea of tapping into the internet revolution to start an internet company we all now as amazon today. Jeff, 30 years old, at that time, quit his job as V.P of D.S Shaw and Co. and started Amazon from his garage, the rest they say is history.

Bezos made a list of ‘top 20′ products that he could be sold on the internet and decided to go with books because of low cost and a universal demand. That was just a start and now we know amazon is everywhere, selling everything.

In an interview at the Academy of Achievement, Bezos revealed that the initial startup capital was funded by his parents. He warned them that there was a 70 percent chance they could lose their life savings but they bet on him and his dream anyway. Later in 1995, Amazon raised a series A funding of $8M from Kleiner Perkins Caufield & Byers. By 1999, the value of its initial investors the Kleiner Perkins Caufield & Byers created returns of over 55,000%.

The rise and rise of Amazon

It was July 1995, amazon.com was introduced to the world. Within 30 days, without any press, Amazon was able to sell books in 45 countries and 50 US states. By September, the sale hit $20,000 a week.

In 1997, Amazon went public to raise capital with a share price of $18. Priced at over $800 per share currently, it took only about a year to reach there.   Since the start of 2015 Amazon’s share price has risen by 173 per cent, seven times the growth of the preceding two years.

Committed to long-term growth, the company has continued to reinvest their revenue back into growth and has been consistently keeping the profit at a minimum.

The Road Ahead

Amazon has big plans for the future. The plans of overseas expansion more aggressive when it finalized to buy Dubai-based souq.com on Mar 29. With Souq.com, popularly called “Amazon of the Middle East,” Amazon will supposedly be getting 23 million online visits a month as claimed by the Souq.

Shipping across 100 countries, Amazon currently operates inside of at least 16 countries. This in no way ensures a smooth sail, for the company. Amazon is facing a tough competition from Jack Ma’s Alibaba in China, the company is on a head on collision with Flipkart in India.  In India, driven by its growth in tier two and three cities, Amazon has left no stone unturned to expand its services. It has partnered with India Post to deliver to all serviceable zip codes to ensure cost effective and faster delivery of products. Despite this, the company accounts for just 16% of the country’s $22 billion e-commerce market, with Flipkart and Snapdeal still holding a large share of   44% and 32% respectively.

The advantage, however, that amazon has is that it is not just restricted to being a mere online retailer and it doesn’t intend to confine itself to that either. Its cloud-computing business, Amazon Web Services (AWS), has been a blessing for the startups. Popular video streaming service Netflix also uses AWS to serve millions of users. Amazon’s personal assistant, Alexa, has been well-received in its home market.

Apart from this, amazon is all set to venture into the offline retail store business. This is an interesting turn since it is the company responsible for populalising online buying.  A New York Times report revealed the company’s  plans to open up electronics stores in the US, for people who might not always be willing to buy products online. Amazon has already launched a bookstore in New York, a grocery store in Seattle, and now plans to open its first retail store in Bengaluru, India. With the guiding principle of “customer obsession rather than competitor focus’” in mind, Amazon wants to redesign the retail experience for its customers.

Although not every path that amazon has trodden along has been a success- Like the Kindle Fire Tablet, Amazon has not shied away from innovation and that has been the key to its success. Although the success of its ventures remains to be seen, as of now, looks like amazon is on its way up and up, fulfilling the customer needs from A to Z with a smile.

WHY WE NEED TO LOOK AHEAD OF GDP?

BUSINESS

WHY WE NEED TO LOOK AHEAD OF GDP?

“What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing.”

Joseph Stiglitz

Nobel Laureate in Economic Sciences (2001)

In an election rally in UP, PM Narendra Modi recently took a jibe at the economists criticizing demonetization. He quoted the new GDP growth data released by Central statistical Organisation, which puts the growth rate at 7 per cent in the third quarter of the financial year 2016-17.  For decades now, GDP and its growth thereof, has been regularly cited in discussions related to the economic progress. China for one has remained obsessed with the growth so much so that as to set specific targets for GDP growth in its annual and five year plans.

RATAN TATA TAKES ON CYRUS MISTRY

BUSINESS, National News

Just days ahead of the Extraordinary General Meeting of six Tata firms, the interim Chairman of Tata Sons pressed for the ouster of Cyrus Mistry as the director  of Tata Sons.

In a letter addressed to the shareholders, Tata sought their support to move a special resolution.

 

The right step would have been for him to resign as director. Unfortunately, he has not yet done so and his continued presence as a director is a serious disruptive influence on these company boards, which can make the company dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons. As a final step he was offered an opportunity to step down voluntarily from the Chairman position, which he rejected and said that it should be taken up at the Board,

Bear has a free run at Sensex

BUSINESS

The S&P BSE Sensex slipped below its crucial psychological support level of 26,000 in the first hour of trade on Monday. This happened for the first time since June 24 on an intraday basis and May 25 on closing basis.

The Nifty50 also pared gains after a positive start and slipped below its crucial support at 8,000 level, weighed down by losses in realty, consumer durables, capital goods, autos and IT stocks.