The Amazon’s Prime Day left a good time to analyze the strategies that the e-commerce giant is carrying out to gradually eat the cake that, until recently, dominated Google and Facebook.
If today Amazon’s weak point were its benefits, the reality is that the last two years have been more consistent and high and have doubled their net profit during the first quarter of 2019, compared to the same period last year , reaching the not inconsiderable figure of 3.560 million dollars.
Although most of these benefits come from online sales through its website, plus those obtained through its platform for third parties – to which it charges a fee plus a percentage on sales -; The truth is that in recent times is diversifying and gaining revenue through new channels. One of them is Amazon Web Services, a section that has allowed it to be a leader in the offer of cloud computing services and which already accounts for half of Amazon’s benefits.
Amazon continues its growth
With the exception of China, where Alibabá is the marketplace of reference, the penetration rate of Amazon continues to grow worldwide.
Taking into account these data, it makes sense that Amazon tries to monetize, more if possible, its dominant position. It is from here, where Amazon is starting to claim its share of the cake to both Google and Facebook, and is promoting advertising within its own platform. Today it only represents 4.3% of Amazon’s revenues, but the statistics predict a great growth to the point of being able to be done in 2020 with 10% of the advertising distribution that until now were shared by Google and Facebook.
Facebook officially recognizes Amazon as a threat
In fact, Facebook has officially recognized Amazon’s advertising business as a threat. Taking into account that in the last quarter of the year, Amazon increased its advertising revenue by 95% with respect to the previous year, it is not surprising that at last Amazon is placed above Apple, Microsoft and Google, as the company with the highest brand value .
For its part Google, faced with the unstoppable threat, has decided to take a step forward in its expansion strategy and has begun to compete directly with Amazon in France, turning Google Shopping into a marketplace [5]. It seems likely that Google will expand this model to other markets in an attempt to try to stop the company of Jeff Bezos.
Considering that Jeff Bezos is already building his own airports, it would not be surprising that Amazon will soon dominate the world.
Also published on Medium.