OPINION: When Amazon shrugged

Not too long ago I stumbled upon a news piece in the Financial Times that mentioned how the paramount regulatory authority in the internet domain name arena was throwing open the doors to release a fresh wave of internet domain names, including much-sought-after ‘titles’ such as .cloud, .search, .book and .app, to name a few.

Little did it surprise me when another news article said Google had filed 101 applications for a repertoire of names such as .google, .youtube and .lol. What did get me riveted was the fact that the next contender, with 76 applications, was none other than a leviathan in the online retailing arena.

Incorporated in 1994 under the little-known name Cadabra, this legendary internet brand was launched online under the new name Amazon.com in 1995 and has since grown to gargantuan proportions. If Amazon hasn't quite achieved the status of having its name adopted as a verb, I wouldn’t flinch if ‘Amazon it’ catches on sooner rather than later. And if you ask me personally, I would only be all too joyous to make a beeline for Amazon any time the topic of books, CD/DVDs and related items rises in my thought field.

Amazon rising

Often, the most powerful upheavals have their origin in the most humble ideas. In this case, long before the dot-com bubble burst, long before the internet economy got its head around the true power of the information super highway, Jeff Bezos had understood that the direct clicks-and-mortar model would throw open a very easy, enjoyable and sticky online shopping vista to the rapidly burgeoning internet audiences and thereby set an explosive growth pattern.

From the simplest of beginnings, Amazon is already in a league where it has started attracting attention from some of the largest brands in both the wired and unwired worlds. A quick snapshot of what Amazon has been up to in recent times gives more clarity on this emerging scenario:

Mobile for the masses: Kindle has always been a cherished product for the massive mobile book-lover audiences, and that extends even to Asian markets where Kindle has not been easily available. Sensing the vast potential in the mobile market, Amazon launched the Kindle Fire, quickly creating a markedly strong positioning through a device that is essentially an extension of its e-book reader at a fraction of the price of the prevalent and popular tablets. Underlining this diversification into mobile was the strategy of selling branded content to make profits while not aiming to make profits with the device itself.

Consider this: In the second quarter of this year, the iPad topped the charts with a 70 per cent share, followed by Samsung coming in at a distant second position with a 10 per cent share and Amazon Kindle occupying the third position with 4.3 per cent market share. With the new Kindle Fire 2, which is considered to be a game changer for Amazon, the massive audiences that are poised to adapt this device is truly mind-blowing (projected sales of roughly 60 million units annually) and is slated to claim the No. 2 position from Samsung once again. To say that the maiden foray into the tablet space by this online retailer has been outstanding itself would be a huge understatement.

Connecting with the masses: Each year, Amazon pays millions of dollars just for shipments of products from point A to point B, and although it doesn’t have overheads like the Best Buys and Barnes & Nobles of the world, shipment costs are significant enough for the company in the long term. To circumvent this and to establish powerful on-ground connections with its mass audiences, Amazon has just started the Amazon Lockers experiment in a few places in the US, receiving great feedback from customers. These are lockers located in places like popular stores. For a small fee, customers have the option of shipping their goods to the nearest locker location. Amazon gets a dual advantage: huge cost-savings from the shipment companies like UPS & FedEx and most importantly, a powerful step into the bricks-and-mortar world. To me, this is a very innovative and differentiated step that is just not to be underestimated.

Storage for the masses: Amazon has just released a new ‘cloud archiving’ service, christened Glacier, which it says will offer "secure, reliable and extremely low-cost" retention of data for as little as US$0.01 per gigabyte per month. Intended to kill off tape-based storage, the service is primarily for business data that is infrequently accessed yet important enough to be stored away for future purposes. It is not meant for consumers or more frequent access, purposes for which Amazon and others chanrge more like US$0.12 per GB per month. Glacier will be available along with Amazon’s other cloud computing services like EC2 and S3 thus making it quite a powerful suite of cloud computing services. Once again, a very thoughtful diversification into a space that is related albeit by a wide berth, is still is a commendable, strategic move from this online giant.

I am sure there is palpable brow-creasing in the Google stables to behold this intimidating fellow-internet brand flexing its muscles and slowly but surely overlapping on turf like e-books, tablets, app store, cloud services, and wallet. The list is beginning to look alarming indeed. Here is a great infographic I found that gives an impressive overview of the emerging battle field. 

To me, it definitely doesn’t warrant any second guesses to see that Amazon is finally emerging as intimidating, heavyweight contender in the online space, armed with ample firepower to cripple some of today’s brash, seemingly monopolistic brands.

Behold, a new dawn is breaking in the Amazonia.