When Amazon’s founder Jeff Bezos announced on February 2 that he will step down as chief executive of his global e-commerce empire, it sent reverberations around the world.
“Invention is the root of our success,” Mr Bezos said in an email sent to employees announcing his transition to executive chair of the Amazon board and focus on passion projects such as space travel and tackling climate change.
“We’ve done crazy things together, and then made them normal,” Mr Bezos added, listing areas his company has pioneered such as 1-Click online purchases, cloud computing and its climate pledge.
The world's second-richest man leaves a divisive legacy at the company, which has overhauled brick-and-mortar retail and changed employer-employee relations. Over three decades, Amazon has grown from a one-man band in his garage to become a global behemoth employing 1.3m people worldwide.
Here’s four charts exploring how Amazon got to where it is today and the company’s vast impact on global investment.
From garage to global success
Starting off as an online bookstore in July 1994, Amazon went public three years later, setting it on its expansion course that few could have predicted. As of January 2021, Amazon had grown to a market capitalisation of over $1.6tn, making it the world’s fourth most valuable company.
While the Seattle-based internet giant has had an illustrious history, a few notable events stand out. Just over four years after its foundation, Amazon moved beyond books to start selling CDs and DVDs on its platform and pioneered it's 1-Click technology – allowing online customers to buy with one click of a button all while collecting their data in the process. At the end of 1999, Bezos was named by Time magazine as the person of the year and "the king of cybercommerce".
Then in July 2002, Amazon announced that it would launch its cloud computing arm Amazon Web Services (AWS), which has grown to account for the majority of the company’s operating income. While companies and organisations once needed to invest heavily to build their own computing infrastructures, cloud significantly reduces these costs by offering servers and space for rental. In 2020, the movement restrictions caused by the pandemic proliferated the rise of cloud and online services further, with AWS seeing sales grow by 30% compared to a year earlier.
Mr Bezos has overseen the roll out of Amazon's now ubiquitous tech products, such as it's kindle e-book reader and virtual AI assistant Alexa, and acquisitions into other industries. These include the $13.7bn acquisition of organic retailer Whole Foods and a $250m deal for The Washington Post newspaper.
Leading global investor
A defining feature of Amazon's ascendancy has been Mr Bezos' long-term outlook and its foreign investments illustrate this. According to investment tracker fDi Markets, Amazon has increasingly announced greenfield projects in foreign markets, reaching a record 179 in 2020, against a backdrop of declining FDI globally due to the pandemic.
While the majority of these projects have been concentrated in the logistics, transportation and warehousing, its expansion of ICT and internet infrastructure is evident too (see chart above). AWS' global footprint stood at 77 availability zones within 24 geographic regions as of February 2021, with the tech giant planning to add 18 more availability zones, including in Indonesia, Japan and Spain. In 2020, Amazon announced several major cloud regions in foreign markets such as Zurich in Switzerland, Melbourne in Australia, and a $2.8bn cloud project in Hyderabad, India.
Major employer, but at what cost?
Amazon's ascendancy has played out in how it stacks up in terms of investments made by other major corporates across the globe. Every year since 2015, the company has created more jobs than any other foreign direct investor globally (see chart above).
Meanwhile at home, Amazon has made more than $350bn of direct investments into its US operations since 2010, leading to the creation of more than 2.7m jobs, according to independent macroeconomic consultancy Keystone.
But while aggregate employment figures point to Amazon’s beneficial economic impact, many have questioned the quality of the work it provides. When the company was on a nationwide search for a location for its second corporate headquarters, it set off fierce competition between US economic development offices who offered billions of dollars of incentives to lure Amazon to choose their location and create the planned 25,000 jobs. But its plans to set up ‘HQ2’ in Long Island, New York were subsequently curtailed over protests from local activists and accusations of worker exploitation, with the company eventually deciding to open its new headquarters in Arlington, Virginia.
It's treatment of workers has again been brought to the fore in recent weeks as it battles with the first effort by US-based employees to form a union at one of its fulfilment centres in Bessemer, Alabama. Amazon has set up a website in attempts to curtail the move and faced kickback from some of its investors.
Amidst Amazon's ascendancy is a backdrop of the declining brick-and-mortar retail sector, which has been battered in the US in recent years as the tech giant's e-commerce business has boomed. Every year since 2017, more US retail stores have closed than opened, according to Coresight Research. In the same time frame, Amazon's global net sales rose from $177.8bn to reach a record $386.1bn in 2020, according to company statements.
As we progress towards Mr Bezos stepping aside for his successor Andy Jassy, the current head of AWS, it seems unlikely any other CEO will have as profound a cross-sectoral impact as the Amazon founder. In the closing remarks of his email to employees on February 2, he said:
"Amazon couldn’t be better positioned for the future. We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish."