Multi-trillion dollar global market
|Pandith Jantakahalli||Dec 22, 2019|
In this letter, Bezos highlights the size of the market opportunity for Amazon and how Amazon is poised to capitalize on this opportunity.
Amazon’s revenue in 1999 was $1.64 billion even though the foundational technology on which the shopping experience was built was the “worst it will ever be”. Increased bandwidth and always-on-access would significantly improve the shopping experience. Adoption of online commerce was growing as millions of new consumers connected to the Internet for the first time. As the online shopping experience improves, consumer trust and confidence would increase, driving further adoption.
Hence, Amazon gets to participate in a multi-trillion dollar global opportunity where the underlying foundational technology improves every day.
Bezos describes what the Amazon.com platform is comprised of and why Amazon is well-positioned to capitalize on the huge market opportunity.
Bezos highlights the head-start that Amazon has over the competition - in its reputation for customer focus, e-commerce software systems, and a purpose-built distribution and customer service infrastructure. He specifies how Amazon’s e-commerce platform will provide a competitive advantage:
Help Amazon to launch new e-commerce businesses faster
Offer a higher quality of customer experience at a lower incremental cost
A faster path to scale and profitability
A higher chance of success
He shares Amazon’s six major goals for 2000:
Growing the number of customers and strengthening customer relationships
Number of customers who shop with us
Number of products that they purchase
The frequency with which they shop
Level of satisfaction when they shop
The rapid expansion of products and services that we offer
Help customers find and discover anything that they want to buy, anytime, anywhere
Makes Amazon more relevant to a wider group of customers and increase the frequency with which they visit the store
Driving operational excellence in all areas of the company by
Delivering continuous improvement in customer experience
Driving productivity, margin efficiency, and asset velocity across all businesses
Expanding our partnership programs
Build partnerships with companies that shares Amazon’s passion for serving customers
Driving profitability in each and every business
You can read Bezos letter here
PS: Summary of all the Amazon Shareholder letters from 1997-2018 are available as a Kindle book.