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How Amazon is not competing with just e-commerce companies

Prabhakar Mundkur
15th Jan 2018
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 As a company, Amazon is thinking much ahead of its time. And it has got its eyes on a lot more balls than the average e-commerce company.

 

When I read the local newspapers today about who is bigger, or who is mightier, or other companies simply disputing Amazon's growth rates, I wondered if the public at large really think that Amazon is just competing with the next e-commerce company? First of all, Amazon wasn't created to just compete with other e-commerce companies, like some other companies that came 20 years after Amazon, who thought it was a good model to follow. It didn't copy its model from someone else. It was an innovation of the internet age. It brought the store into your home. It was the first. It created the category. But is that where it is now? Just where it was? Or has Amazon moved well beyond being an e-commerce company is what we are going to examine today.

Amazon is constantly driving innovation

As a consumer I can see they are constantly driving innovation. For me, personally, as a consumer there have been several instances. Amazon Prime was only the first tactic that moved me from being just a e-commerce customer to appreciating what is often referred to as the 'Amazon Effect'. Especially in the Indian market where e-commerce companies are busy burning up money, and living from moment to moment by creating a highly discounted market place with scant respect for building a brand or any stickiness with the customers.

Amazon Prime offered me two distinct advantages that have made me stick to Amazon.

  1. It took the cost of delivery out of the equation.
  2. It made me feel special. It made me feel like a BA first class customer with tons of points.
  3. It offered me a whole array of video content that was previously not available to me.

And when I took the offer, Amazon Prime offered me video content at Rs 500 annually in comparison to Netflix which cost me Rs 500 per month. I have been a staunch Apple fan for as long as I know, and even though I was one of the few to own an Apple TV so that I could project ODD platforms and other video content from my laptop to my TV, the Amazon Firestick has actually made me throw away my Apple TV. Besides, Amazon is now firmly in the movie-making business with Amazon originals, and has a good number of movie titles as well as TV serials to their credit. The transformation from an e-commerce company to a content and entertainment company has been stupendous.

At a cost of Rs 3,999, I not only bought but have already gifted five Firesticks to friends and relatives. And, frankly, it has brought me even more content than my Apple TV could, besides getting me other platforms like Netflix. The problem with Apple was that I couldn't access the Amazon database. With Amazon Prime they are invading my time, and getting me to spend more time with the brand.

Not to mention the two million odd songs on Amazon music via Amazon Prime. I had almost forgotten that they had been building their data bank on music, until I asked Alexa to play me some Ed Sheeran on Amazon Echo.

And while it doesn't exactly compare with either Apple Music or even Google's or Spotify's library, they certainly have made a great start.

The kindle reader

And, of course, don't forget the Kindle reader. For a long time now ever since I ran out of bookshelf space I have been buying books only on Kindle. And because Amazon is friendly to other ecosystems like Apple, I am able to buy Kindle books but read it on my iPad. Imagine how many customers Amazon has built a special relationship with, through their reading habits. It’s just amazing!

Alexa is changing the world

The first time I experienced Alexa was of course through the Amazon Echo Dot. It was just an amazing experience. It felt like futuristic films were actually depicting a reality of the present. But Alexa is soon going beyond just being a voice-controlled device that can control everything around in your environment. Ford, for example, is integrating Alexa into cars as was demonstrated in this video.

While Amazon may not create driverless cars on their own, they have set up a team to explore driverless technology, but more with a view to bring down their cost of logistics, and make it more cost-effective. And in all this discussion one may have completely forgotten about Amazon Web Services that offer cloud computing services. This is a profitable business for them and can spark off their innovative streak. Or even the convenience of Amazon Pay.

So where were we again?

Yes, Amazon as the retail commerce company will no doubt have its rivals. But as a company it is thinking much ahead of its time. And frankly it has got its eyes on a lot more balls, than the average e-commerce company. And to me it does believe in the irrefutable power of the brand. And all this all goes towards creating the magical ‘Amazon Effect’. It is unlikely that another e-commerce company that is doing nothing besides giving me good discounts is likely to compete with it in the near future.

It is no surprise then that Amazon made it to number three in the Forbes Most Innovative Companies list in 2017. Frankly, I can't see any of their e-commerce competitors being in the top 10!

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This article was first published here.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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