How does Amazon contribute to eCommerce| The industry Direction Now?

Hey, Alexa! How many people visit Amazon every month? 

You don’t know? Almost 200 million people visit the page monthly, according to Amazon statistics. The site sees around 2.2 billion page hits every month. Approximately 44% of these people choose Alexa and Amazon as the primary place where they’re going to search for a product. 

Impressive numbers? You bet they are, and they’re about to become even bigger in the years to come. 

The path of eCommerce

Amazon was first published in 1995. The biggest eCommerce store in the world, Alibaba, was founded in 1999. That’s about the time when buying over the internet started, and these major players managed to hold and expand their business over the years to become trading giants today.

Somewhere around the beginning of the new millennium, around 2% of the population shopped online. Today, on a global level, the number is much higher. According to Statista, around 22% of the retail sales are happening through the internet. We can say that things went pretty far in less than 20 years. 

However, these numbers are surely going to change dramatically in the next 10 years, and especially until 2050 when it’s expected internet trade to dominate completely. The reason for this is new technologies. They are changing the face of business and industry all around the world.

For example, the constant rise of artificial intelligence is affecting eCommerce companies. AI and the automation of processes are going to increase productivity. They are also making a lot more profits for the owners of these brands. More profits will mean more investment, and more investment means happier customers who get more from their favorite e-shops.

That will inevitably attract more customers to the internet. People will realize that they don’t have to leave the house to buy something. Until now, customers struggled with the payment methods, but the technology jumps to the scene again. Amazon already has special apps that help their clients pay for any product without the need to do anything complex.

It was a nightmare for older generations when they wanted to buy something online. All those registrations, writing information, sharing credit cards, they hated this. Now, a simple download from the smartphone app store solves the problem. 

The Amazon Pay app was downloaded through the Google Play store over 5 million times alone. That means these people should just type in or speak the name of the product they are interested in, and they’ll have it delivered in no more than 30 minutes. 

Yes, 30. How is this possible? Well, Amazon is one of the biggest tech-savvies there is in the American business. The CEO, Jeff Bezos, loves investing in modern technologies. The company started delivering goods that are up to 10 pounds around the American cities with drones. Directly to your location. The project is called Amazon Air. In a way, it’s now faster to order through the internet than to actually go to the store.

The Far East influence on eCommerce

If you’re an American and when someone mentions the term buying through the internet, you instantly think about Amazon and eBay. The rest of the eCommerce world is dominated by someone else – Alibaba. 

Alibaba and its founder Jack Ma, are on top of the selling through the internet business. They had some interesting opportunities in the development of their business, no doubt. The fact that they are located in China, which is a unique example of a society that no other place in the world has, gave them an opportunity to raise the business to a vast level.

China is a country of 1.38 billion people. More than half of them have internet access and love to buy online. On the other hand, Amazon’s market in the USA is much different. The country has around 327 million people, and 78% of them have internet access. That’s more than a billion people difference.

Amazon realized that they couldn’t compete in this vast Chinese market, so they simply avoided it. Alibaba, on the other hand, is happy to offer its products in other parts of the world, including the USA. 

What is important in this is that the Chinese people didn’t always have this buying power nor internet access. Things have changed dramatically in the last 20 years. On top of everything, now India’s 1.3 billion population also begins to impose itself as a factor. So the eastern influence on the eCommerce market is highly important, especially if we talk about the future of the industry. 

Amazon’s investment in technology

Some people love to say – quality over quantity. Jeff Bezos obviously knows this saying. He probably realized that the company can’t compete with the number of customers around the world. He had to do something else to stay on top. 

Bezos once said – your margin is my opportunity. He obviously decided to raise the stakes in the meantime and start owning that margin. 

Jack Ma built Alibaba as an eCommerce site where other retailers sell their products through it. Amazon started the same idea but is now earning more from their own products, rather than the interest gotten from other sellers on their page. 

Amazon made over $31 billion from its products in 2019. At the same time, Alibaba doesn’t even own a warehouse. On top of this, Amazon is always testing and pushing new ideas, new products, and new technologies forward. 

One of the most popular inventions and products of the company is the smart speaker called Amazon Echo. This product is equipped with AI software and is capable of controlling the appliances around the home. Americans simply love it. More than 60 million American households are defined as smart homes because they have some kind of smart technology. 

Around 63% of the entire smart home industry belongs to Amazon. Google owns 17%, and Apple is responsible for only 4%. Now, most of the revenue doesn’t come from selling the Echo. This is just a part of the cake. What’s more important is that through it, people search for other products and this is highly important. 

Why? Because Amazon’s devices are equipped with AI that is more clever than you think. Whenever someone searches for a product through the voice search, the software will offer the other Amazon products first. If there’s no Amazon product for the search, then they’ll look up online using the search engine. And this is also pretty interesting. Alexa uses Bing as their default search engine, not Google, as 90% of the rest of the world. 

This opens a ton of opportunities for companies to work with Amazon and Bing, and offer their products through them. 

How about the other investments Amazon is making? Like autonomous vehicles, drones, Artificial intelligence, all kinds of other stuff. Jeff Bezos does not save money on these things. He helps other companies and industries in developing the technology because he thinks this is the best for everyone. 

For example, the company invested around $700 million in the autonomous vehicle project led by Rivian, a new startup in the industry of electric vehicles. They made a deal and ordered 100.000 electric vans

The idea is to create a pollution-free, safe environment which will also help the company in delivering their own products with their own vehicles instead of paying for the service to someone else. It’s a win-win and another win situation. Rivian gets to rise and develop autonomous vehicles, Amazon saves on delivery, and the society lives in a pollution-free world.

Jeff Bezos’ company definitely makes a lot of money but spends a lot too. In the headquarters in Boston, the offices around the world, and the warehouses, they employ a total of 750.000 people. That’s more than the number of citizens that some countries around the world have. 

The dangers of becoming eCommerce dependent

This is an issue that is not largely talked about, but it deserves some attention. Seeing where the industry is headed, it raises a question of whether this is right or wrong. For the companies making more and more profits, this is a good thing, but for the society – not so much.

Why do we say this? Because all stats show that in the future, people will be able to order everything through the internet and receive the goods at their doorstep. If we take the fact that people are more and more turning into remote workers, we realize that in the near future, everyone will become completely alienated and spend only time with themselves. 

The facts say that 18% of US workers work full-time. Since 2005, the number of remote workers increased by 140%. That means all these people are almost not leaving their homes unless they need to go shopping, visit the doctor, or see their friends and family. They are locked in. 

With the ability to have everything delivered at home in no time, psychologists have worn that they’ll turn into “zombies” – people who are not socializing, which might turn into a huge problem. The suicide rate will surely increase, and psychological problems will also go up. Still, with proper institutional care, this can be lowered to an acceptable level. Awareness is needed, though, just like on-time action.

The benefits of eCommerce for society

Is talking about the benefits even needed? Isn’t it obvious how much society will get from the rise of eCommerce? Amazon’s efforts for robotizing and speeding up the process of shopping is already revolutionizing America. Soon, the rest of the modern world will adopt this way of doing business because everyone benefits from it.

In 2021 it’s expected the eCommerce industry to be worth a staggering $4.5 trillion. So the benefits for the companies working with it is obvious. What about the ordinary person, the one that is a customer? 

At the moment, around 1.8 billion people are using the internet to buy something for themselves. By 2021 it’s expected this number to reach 2.14 billion. That’s almost ⅓ of the entire world population. By 2050, the expectations are that more than 95% will be internet shoppers, which means the entire trade will happen online.

What does that mean? It means that no one will need to spend time on research on products and actual searches for them. Everything will be accessible in a single voice search. Even now, Alexa provides this option through Amazon, and in the future, it will be even easier. Knowing the fact that AI is going to know exactly what we want and what we prefer, you can be sure that the line between making a wish and having the item in your hands will be cut to a matter of minutes.

Saving the environment is also an important issue. The implementations that we mentioned will surely benefit from getting a better life – clean air, noise-free cities, and reduced traffic jams. In 2015, every third vehicle on the streets around the world was commercial. More than 335 million commercial and 947 passenger cars produced toxic gases. This is going to change significantly in the future by implementing the technologies that Amazon forces.  

Conclusion

Even though Amazon is not the leader in sales in the eCommerce industry, it is definitely the company that drives the industry forward. It’s a pioneer, and that means it is responsible for lots of novelties and ways of doing business that others will follow. 

The future is bright for Amazon. The eCommerce development company, in general, is going to change the ways of doing business without a doubt. It’s up to us to wait and see how things will move forward and whether all predictions will accomplish.

Add a Comment

Your email address will not be published. Required fields are marked *