By almost any measure, Amazon is big. It’s valued at around $900 billion, even after a recent global slip in retail. It’s the country’s second-largest corporate employer. It handles and ships more than a fifth of all packages in the US. Of the 100,000 biggest websites on the internet, more than a third live on Amazon’s cloud servers, and when founder Jeff Bezos left the company in 2021, he was the world’s richest person.
But CEO Andy Jassy favors a different way of framing Amazon’s magnitude. This e-commerce juggernaut, as Jassy has put it in numerous press interviews, is just a meager slice of the global retail market.
“In our retail business, we are about 1% of the world’s retail business segment,” he said before he became CEO of Amazon, in a 2019 interview with PBS’ Frontline.
He said it again in a Vanity Fair interview after taking charge of Amazon in 2021. And again in June 2022, in an interview at the Bloomberg Technology Summit. Bezos and former Amazon executive Jeff Wilke have thrown out the 1% figure, too.
With this 1% refrain coming up so often, it raises the question of why a company so big wants you to think it’s so small.
As it happens, the Federal Trade Commission is conducting an antitrust probe of Amazon. The agency has subpoenaed Jassy and Bezos to testify as part of its investigation into the company’s practices around signing up for and canceling Prime memberships. Multiple suits from state attorneys general are aiming to loosen Amazon’s grip on how third-party sellers set prices. And bills floated by Congress target Amazon’s power to promote its products over similar items listed by third-party sellers.
The final outcome of the FTC’s probe, and of all suits against and scrutiny of Amazon, has yet to be determined. But the aim will be to give the prices you pay for certain types of products, like books or electronics, a breather from Amazon’s influence. Another goal will be to give other retailers a better shot at offering you alternatives for shopping online and off.
And if antitrust efforts heat up this year, you’re going to hear that 1% claim a lot more.
When asked, an Amazon spokesperson said the company wasn’t framing its size through the lens of global retail to look small.
“We have simply offered the global retail number to illustrate how competitive and vast retail is,” the spokesperson said in a statement, adding that the company also represents 4% of US retail while physical stores make up 85% of the market. “This is where Amazon competes for customers.”
One percent may sound small, but grade-school math tells you that dividing a very large number — $27.3 trillion for global retail in 2022 — by 100 still gives you a big number. The resulting $273 billion also includes money made by third-party sellers on Amazon’s platform, the company said. Amazon declined to give a dollar figure for how much money goes to third-party sellers, but said it was nearly 60% of total sales. Nonetheless, antitrust watchdogs say the 1% figure is a distraction. What’s …….