Is Inorganic Growth What's Really Driving Amazon's Sales?
by Michael Fu
Amazon (AMZN) started in 1995 selling physical books over the Internet. Over the next 15+ years, Jeff Bezos built Amazon into the largest e-Commerce player in the United States, with 25% market share in the U.S., if you include 3rd party GMV. This article won't debate that achievement, in fact I'm impressed by it. However, this article will argue that in recent years, the momentum of Amazon's success in U.S. e-commerce market may be slowing down, possibly due to Amazon running out of new product categories to launch (there's only so many categories that would make sense for online shipping). As a result, Amazon has had to turn to what I will call "inorganic" growth (or non "same-store sales" growth), in order to continue to drive top-line sales growth of +30%. Inorganic growth, by my definition, includes recent acquisitions (Zappos, Daipers.com, LivingSocial, Kiva), but also includes recent new international market entries (Italy and Spain) and recent new business lines (Kindle tablet, Prime Instant Video). read more »
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