Amazon will be very different in the next 10 years

If strong growth in the non-retail sector is a sign, then Amazon will be very different in the next 10 years.

Over the years, Amazon has grown from selling books to selling almost everything, and offering a range of additional services, including free shipping, same-day delivery, video streaming, smart home devices and cloud storage.

Just as no one expects Amazon to be the world’s largest cloud provider 10 years ago, it will open a physical bookstore in 10 years or offer customers an innovative way to shop – no cashier (Amazon store). Amazon is likely to pursue growth opportunities in a decade.

While it’s hard to predict what Amazon will look like in 10 years, it’s so unpredictable throughout history, and it’s always exploring the next big thing. But we are concerned about some of the key areas that the company is developing.

Expand international business

According to eMarketer, Amazon is the largest e-commerce platform in the United States, with online sales estimated at 49%. It is surpassing Wal-Mart and is the largest apparel retailer in the United States. In addition, Amazon has also turned its attention to the leading control of groceries.

Although Amazon’s annual revenue is close to $233 billion, its size is already very large, but there are still many places in the world where Amazon has not yet penetrated. International revenue accounts for about 28% of the company’s total revenue, and the largest market outside North America is Germany.

However, in the next 10 years, Amazon may encounter some obstacles in international expansion. In China, Amazon’s share of e-commerce sales is less than 1%, while Alibaba is firmly in control of this market. In India, where Amazon has been investing heavily, Amazon has encountered an obstacle: the government has introduced new e-commerce and anti-monopoly policies, forcing foreign competitors to compete more on service quality than price.

Elsewhere, Amazon has just begun to get involved. Last year, Amazon began to expand in Brazil and opened its first e-commerce store in Turkey. Amazon’s international business is generally at a loss, but it also shows Amazon’s determination to develop. Building infrastructure in these countries requires billions of dollars, not to mention bypassing complex legal and regulatory environments. With the exception of Walmart, not many companies in the world have enough money and patience to lose money in a few years, while building the necessary scale to make a profit.

Advertising is exploding

Another exciting opportunity for Amazon is its booming advertising business. Amazon allows other companies to sell their products on Amazon’s product listing page and earn billions of dollars in revenue in the process. For example, more and more people are starting to search for products on Amazon, not Google for Alphabet. This is very appealing to advertisers because they know that when they browse the products listed on Amazon, their products will immediately appear in front of people who already have a shopping mindset.

Although Amazon did not specifically disclose advertising revenue, its “other” revenue categories (mainly including advertising revenue) increased by 117% to $10.1 billion in 2018. Amazon’s advertising business is growing at a faster rate than Facebook and Alphabet. It is estimated that by 2020, Amazon’s advertising business will reach 15 billion US dollars, eMarketer expects this will be at the expense of Google’s digital advertising share.

cloud service

While Amazon’s core retail business will continue to grow globally, investors should focus on Amazon’s cloud services (AWS). AWS helps organizations connect and scale a wide range of services and systems in the cloud, including machine learning, blockchain, storage, database system hosting, analytics, and business applications, among others.

Over the past few years, AWS’s revenue has more than doubled to $27.7 billion. According to research firm Gartner, Amazon’s share of the public cloud services market in 2017 was 52%.

In addition, AWS contributed nearly 59% of Amazon’s total operating profit last year. An analyst at MKM Partners believes that by 2024, the market value of only one AWS company could reach $1 trillion, more than Amazon’s current market value of $871 billion.

Amazon 2029

In the next 10 years, you can expect Amazon to continue to advance internationally and penetrate into the gaps in business to help more people turn to the digital economy. Given that e-commerce sales still account for less than 10% of US retail sales, there are still many opportunities in the US.

International, advertising and AWS are some of the important factors driving future growth, but CEO Jeff Bezos has never lacked the idea of ​​where to lead the company. As Amazon is currently looking for opportunities in the non-retail industry, such as the $135 billion video game industry and the $3 trillion healthcare industry, the company is likely to look very different in 10 years. But that’s why Amazon is one of the most dynamic companies in the world.

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