Tag Archives: amazon

Jack vs Jeff: The two biggest ecommerce billionaires in the world are total opposites

 

In 1990, Jack Ma was teaching English to a group of university students at Hangzhou Dianzi University. Who would have thought that, 24 years later, he would be China’s richest man?

In that same year, Jeff Bezos was working at D.E. Shaw & Co., an investment management firm based out of New York City. After graduating summa cum laude from Princeton university with a Bachelor’s degree in computer science and electrical engineering, there was no doubt Bezos would end up in tech, it was just a matter of time.

Years later, both of them would come up with similar names for their companies. Bezos wanted Cadabra, a name that signified magic. Ma wanted Alibaba, hoping that the name would open doors with an “open sesame”. But that might be as similar as they can get: ecommerce and magic.

These origin stories are tell-tale signs of two diverging philosophies and the companies they gave birth to. And yet they meet in some inroads. Just one month after Alibaba’s IPO, let’s take a deeper look at the two founders and the companies that are destined to shape the future of online retail.

Putting customers first?

Amazon is notorious for its obsession with customers. In fact, it’s Bezos’ go-to mantra and arguably his number one rule when it comes to how the culture of Amazon should be set. Bezos is a customer-centric founder:

We have so many customers who treat us so well, and we have the right kind of culture that obsesses over the customer. If there’s one reason we have done better than of our peers in the Internet space over the last six years, it is because we have focused like a laser on customer experience, and that really does matter, I think, in any business. It certainly matters online, where word of mouth is so very, very powerful.

But Jack Ma has a slightly different angle. Ma told CNBC newscasters, minutes after Alibaba listed on the New York Stock Exchange on September 22, “Customers first, employees second, and shareholders third.” What the newscasters didn’t realize was that when Ma thinks of customers, he’s not talking about everyday consumers in the same way as Bezos. To Ma, his customers are the small businesses that use the firm’s Taobao and Tmall marketplaces. Speaking at Stanford in 2013, Ma outlined this clearly:

Alibaba is not a company for consumers […] I knew that we didn’t have the right DNA to become a consumer company. The world is changing very fast, and it’s hard to gauge consumers’ needs. Small businesses know more about the needs of their customers. We had to empower our power sellers and our SME’s to support their customers.

This divergence is profoundly clear when you dig into stories about Amazon’s dealings with small businesses. In 2006, Amazon throttled the sales of a 200-year-old German business selling knives. In 2007, when Amazon released the Kindle, it didn’t reveal the US$9.99 price to publishers until the day of the release. And just this year, Amazon is making it harder for customers to buy books from publisher, Hachette, all because, as Forbes notes, “Amazon wants a bigger piece of its suppliers’ profit margins to purportedly pass on to its customers in the form of lower prices.” Amazon functions like a monopolistic empire.

You just won’t see this kind of behavior at Alibaba. The philosophy is poles apart from Amazon’s. This is what Jack Ma had to say on this very topic at Stanford in 2011:

I believe in the internet time, there is no empire thinking. I hate the empire. Empire thinking means join me or I’ll kill you. And I don’t like that model. I believe the ecosystem. […] I believe everybody should be helping each other, connecting each other. It’s an ecosystem. So Taobao become so big, so fast, and I worry about that. Give the industry some opportunity, give the competitors some opportunity.

See: Jack Ma’s Last Speech as Alibaba CEO
## No money, no technology, and no plans

When you dig deeper into the business philosophies of these two giants, you start to see even deeper discrepancies. When Ma spoke again at Stanford in 2013, he outlined some peculiaritiesof Alibaba’s founding story.

The ignorant are not afraid. There were three reasons behind our success. They were very valid points. First, we had no money. Second, we didn’t understand technology. Third, we never planned.

Alibaba started with RMB 50,000. That’s about US$8,150. When Amazon started out, Bezos got US$300,000 from his parents.

Ma was an English teacher before starting his entrepreneurial journey. Bezos graduated from an Ivy League school.

In contrast to Ma’s “no plan” (he goes into it much deeper here), Bezos is the meticulous planner. In a short video in 2009, following the acquisition of Zappos, Bezos outlines the “only things he knows.” The list includes: obsessing over customers, inventing, and thinking long-term. Bezos adds:

Any company that wants to invent on behalf of customers has to be willing to think long-term. And it’s actually much rarer than you might think. I find that most of the initiatives that we undertake may take five to seven years before they pay any dividends for the company […] It requires and allows a willingness to be misunderstood.

But in one or two ways, these tech titans are growing. Today, Ma’s net worth is US$21.8 billion, making him the 37th richest person in the world. Bezos is worth US$30.5 billion, putting him 21st on the list.

Epilogue: Beyond Alibaba, beyond Amazon, beyond money, beyond humanity

https://www.techinasia.com/jack-ma-jeff-bezos-amazon-alibaba-billionaires-ecommerce/

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Amazon and Google have been throwing around ideas of new same-day delivery

FedEx is one of the largest courier services in the US. It benefited hugely by the increasing trend of e-commerce which greatly increased the demand for courier packages. With the expansion it benefits not only with larger sales revenue but also Economies of Scale which result in a greater profit percentage. However this might end soon, much to the apprehension of FedEx. 

 

Tech giants Amazon (AMZN) and Google(GOOGL) have been throwing around ideas of new same-day delivery technologies including driverless cars and automated drone shipments. This deeply threatens the postal industry FedEx operates in. This is likely to reshape the logistics industry sometime in the foreseeable future.


At the end of its 4th fiscal quarter of 2014, shares of FedEx shot 6% higher in response to the higher earnings. However this was not distributed evenly in every segment. 
 
FedEx has three major segments; Sales, Ground and Freight. While Sales grew only marginally from $6.98 billion to $7.00 billion, FedEx Ground showed a better performance. Its revenue increased 8% and the Ground segment’s daily delivery volume was up 8%, boosted largely due to growth in e-commerce. Freight, showed the largest relative revenue increase, a 12% increase. 
 
Recently the expectations from FedEx have increased even more.  Estimize is forecasting that FedEx will report a 2 year best improvement, with earnings per share rising by 28%. Also revenue will match a 6 quarter best yoy growth rate of 4%.
 
A lot of it depends on Alibaba too.  If the Chinese e-commerce giant can quickly gain a foothold in the United States and outside mainland China, there will be a spike in the demand for delivery logistics which FedEx and other courier services may capitalize on.  
 
It is safe to assume FedEx will be profitable. However, questions begin to arise when one considers the potential for Amazon, Google, and other tech companies to go after the logistics business 5 to 10 years from now. However, for now, Amazon and Google will rely on couriers for high scale logistics support, at least until they release autopilot enabled cargo planes, driverless electrics trucks, teleportation or the likes. 

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Sales technology will replace 80 percent of the jobs

The growth of Amazon and eBay illustrates that businesses and consumers alike are willing to purchase what they need online rather than from a salesperson.

That trend toward online buying will continue, according to Gerhard Gschwandtner, publisher of Selling Power magazine, and host of the Sales 2.0 Conference in Boston on July 14, 2014. “The integration of Artificial Intelligence into such websites increase the products and services that can be purchased online,” he explains.

Gschwandtner estimates that within 10 years, as much as 80 percent of the sales situations currently handled by salespeople will be handled automatically. He also believes, however, that there will continue to be a need for salespeople in the three following situations:

The customer cannot diagnose his own problem.

The customer cannot define a solution

The customer cannot calculate the ROI

http://www.inc.com

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Amazon May Have Just Created a Weapon of Mass Consumption

With its announcement of a new smartphone this week, Amazon unveiled advanced camera technology that could arguably be called “point and shoot yourself in the foot.”

Amazon’s foray into smartphones includes image-recognition technology that lets consumers point the phone at a product to buy it from its online store. The phone’s Firefly button recognizes more than 70 million products, the company says. Mixing compulsive smartphone usage with the instant gratification of point-and-purchase could take impulse spending to a new level. Within minutes of the announcement, the twitterverse saw the potential: “Amazon launches a shopping machine,” one person tweeted, “calls it a smartphone.”

But shopping convenience may come at a high cost for some people. The more removed people are from purchasing with cash the more they tend to overspend, behavioral finance experts say. Research shows that when people pay with plastic they can spend 20 percent to 30 percent more than when they use cash, says Denise Hughes, a financial coach based in San Carlos, California. Casinos use chips, behavioral experts note, to also remove the regulating “pain of paying.”

The phone could remove “frictions and barriers” — like taking out a wallet — that get people to think about purchases in a less emotional way, says Dan Ariely, behavioral economics professor at Duke University’s Fuqua School of Business. “The ability to act very quickly on our emotions is going to simply get people to buy more impulsive things,” he says. And those things, he adds, aren’t going to be vitamins or long-term savings bonds. “They’d buy stuff that is more shiny and tempting at the moment, like the new Amazon phone.”

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Jeff Bezos’ stealthy foray into the unsexy world of B2B distribution is likely

Forget the delivery drones and TV deals. Jeff Bezos’ stealthy foray into the unsexy world of B2B distribution is likely his most disruptive move yet — and it has an $8 trillion swath of the economy running scared.

In recent months global Internet retail behemoth Amazon.com   has green-lit six new original TV shows, announced an online streaming deal with HBO and tested same-day grocery delivery on the West Coast.

Up next? Possibly a smartphone. And, if billionaire CEO Jeff Bezos has his way, packages dropped off by unmanned drone.

But there’s one thing Bezos hasn’t been talking about: AmazonSupply, an e-commerce site targeting the unsexy but hugely lucrative wholesale and distribution market. His silence is especially surprising as the site has the potential to turn into the most important development in the company’s history since it started selling books. Yet Bezos has uttered only 28 words in public–ever–about Amazon Supply, describing it in passing as “an incredible category” during the company’s 2012 annual meeting.

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Amazon offers employees $5,000 to quit #Amazon #zappo

Amazon is offering its warehouse employees up to $5,000 to quit their jobs, even as the company is in the process of adding workers and locations.

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