Why Amazon will win the race to $2 trillion

Linda J. Dodson

Amazon also has a clear runway of growth in the years ahead, not only in its core e-commerce business but across several others.

Amazon Web Services, its highly profitable cloud computing arm, is still growing at over 33pc per year.

Amazon Prime Video, its streaming business, is likely to have enjoyed a boost from lockdown viewing, while its often overlooked advertising business is rapidly emerging as a serious contender to Facebook and Google.

Amazon is somewhat cagey about the performance of this unit, refusing to break it out. 

But its “other” category, which mostly covers the ad division, was up a stunning 44pc in the last quarter to $3.9bn in revenue. 

The company possesses detailed insights into its customers’ tastes, their likes and dislikes, and it’s increasingly leveraging that information for fresh commercial advantage. 

Then of course there is e-commerce, where Amazon remains hugely dominant and where it has enjoyed a huge advantage during the temporary shutdown of so many bricks and mortar retailers.

There is also still huge scope for growth, especially in international markets.

For Jeff Bezos, who will appear before a US Congressional hearing into competition next Monday, the company’s biggest threat does not come from its rivals so much as from politicians and regulators.

From the amount of tax it pays to the impact Amazon is having on the high street and the dominance of its cloud computing arm, as it edges towards $2 trillion in value Bezos’s extraordinary creation is facing growing calls to be pruned back.

Whether or not that pressure yields results, Mr Bezos doesn’t have too much to worry about.

The world’s richest man – whose personal stake in the company jumped by $13bn in value on Monday alone to a total of $189bn – is unlikely to feel the pinch any time soon.

What do you think is the reason for Amazon’s success? Let us know in the comments section below.

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