Amazon to Remain Dominant Even as New E-Commerce Giants Grow
today at 9:29 am
As Amazon founder and CEO Jeff Bezos is set to appear for an antitrust hearing before the United States Congress on Wednesday it’s symbolic of the emerging e-commerce hegemony.
Bezos, 56, is projected by some market evaluation tools and metrics to become the world’s first trillionaire sometime in 2026. With a current net worth estimated at $156 billion, if Bezos was his own country, he’d currently be the 169th richest nation on Earth. Yes, this is one man and his unfathomable wealth, at a time when the greater economy itself is plunging into freefall.
And while all stay-at-home economy discussions begin with Amazon, the contemporary version of John D. Rockefeller’s pre-Sherman Anti-Trust Act Standard Oil Company, there is a lot more to big commerce enterprise online than just Bezos’ globe dominanting entity. On both the business side and the consumer side, websites that thrive right now during the pandemic will likely continue to succeed once the coronavirus pandemic is over and our daily lives become less online and more IRL (in the real world).
BigCommerce, an enterprise provider with a suite of cloud-based ecommerce software solutions, is set for its initial public offering this wek. Backed with $225 million from a list of investors that include Revolution Growth, General Catalyst Group, GGV Capital and SoftBank, they’re hoping raise $130 million from their IPO and reach a valuation of $1.3 billion.
Meanwhile Shopify, a Canadian e-commerce giant with annual revenues of a billion and half dollars, not to mention 3 and half a billion dollars in total assets, just received a major boost in its fiscal outlook. Powerhouse financial firm Goldman Sachs upgraded their rating on Shopify stock from neutral to buy, stating their beliefs that the major shift to e-commerce will continue until at least 2023.
Goldman analyst Christopher Merwin believes this trend “is unlikely to reverse course, even as the country reopens, due to an accelerated pace of bricks-and-mortar store closures that will force even more commerce online.” Yes, while the COVID crisis has claimed many ledger sheet victims, including Pier 1 Imports, JCPenny, J. Crew, Brooks Brothers and Neiman Marcus, Amazon keeps on winning. Actually, they’re winning so much that it’s become unfair and they’re stopping others from playing; hence the Anti-trust hearing.
While Amazon lagged behind the S&P 500 and found themselves the second worst performing FAANG stock (behind only Netflix), 2020 has been great for them. COVID-19 has made Amazon even more indispensable than they already were, accelerating its customer growth. Given how many of us will prioritize convenience over just about everything else when shopping, one can expect a lot of those new customers to stick around for the long haul.
Eventually, however, something will have to be done about Amazon’s dominance, because simply put, it’s getting dangerous.
Paul M. Banks runs The Sports Bank.net, which is partnered with News Now. Banks, the author of “No, I Can’t Get You Free Tickets: Lessons Learned From a Life in the Sports Media Industry,” regularly contributes to WGN TV, Sports Illustrated, Chicago Now and SB Nation.
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