Jeff Bezos has confirmed Amazon’s growth is slowing

https://www.bloomberg.com/opinion/articles/2019-04-11/jeff-bezos-just-confirmed-amazon-s-growth-is-slowing

by pseudolus • 7 years ago

112 105 7 years ago

They've clearly spent the last 10 years spending like crazy, in a frantic (and successful) effort to diversify their offerings.

Yes, they'll first and foremost be "internet walmart", but only a fool would think that the insane growth was unstoppable - Jeff Bezos is many things but he's not an idiot.

Simulacra• 7 years ago

I'm curious if acquisitions impact the rate of growth, Amazon has been on a buying spree these past couple of years.

gcb0• 7 years ago

they finally stagnated. the site is still as unusable as when I first used it.

Search and categories are complete garbage.

The listings that breakdown price (e.g. $/unit or $/Gb or $/ounce) are a inconsistent mess in the same search result, sometimes showing different units for the same product from two sellers!

and I still have no idea if a listing will be OK or from a seller worse thab ebay.

toufiqbarhamov• 7 years ago

I can live with the unpleasant UX as far as that goes, but where it implodes for me is having to sift through endless fake reviews, counterfeits, and shit products. “Amazon’s Choice” is frequently garbage, and everything else is a coin flip at best. I have to use Fakespot just to sift through the more obvious dreck.

Of course it’s AWS printing their money, not retail.

sonnyblarney3• 7 years ago

"Search and categories are complete garbage."

I'm consulting in the pet space, if you search for 'Mousr' which is the name of a very cool pet toy brand that they carry - you get PC mouses (ie 'Mouse'). Not the brand 'Mousr'.

So basically their 'spell correct' 'Mousr->Mouse' utterly and completely overrides the notion that the users wanted to in fact input 'Mousr' to get that product.

Instead, in order to find the product, you have to type the company name 'Petronics'.

FYI - if you've worked in NLP, you might recognize this problem: the edit distance from Mousr->Mouse is short, and the 'e' and 'r' keys are beside one another, and of course the word 'Mouse' is very common while the word 'Mousr' is very uncommon, leading the error correction algorithm to 'over correct'.

This is a problem in NLP where very uncommon things that are lexically adjacent to common things get suppressed.

Since 'Mousr' however, is 100% in the Amazon catalougue, you'd think they'd include it!

But no.

Consider the resulting 'lowest common denominator' approach: statistically speaking, it might be slightly more economically efficient to actually assume the error and show PC mice, besides, 'everyone' needs a PC mouse anyhow!

But the interesting, long-tail stuff gets suppressed.

This is to me the statistical epitome of not just Amazon, but of our new, globalized culture - the big brands have such power they just bulldoze through everything else - and the 'short run' economics are in their favour! They can point to 'the efficiency of the search' etc. to validate to everyone else in the equation (ie city councillors approving permits, banks giving loans, buyers - heck, even consumers) to validate their case on competitive, culturally secular grounds.

It takes quite some magic, a loyal following, a magic meme of attention, a super faithful investor, or deep rooted cultural behaviours (like Italians who could care less about the new 'Starbucks' because they already have good coffee).

Most big CEO founders have made some kind of 'big claims' or almost arbitrary statements about 'how it ought to be' and they stuck to their guns on those, I wish Bezos et. al. would think just one tiny bit about the 2cnd order effects of their businesses.

iClaudiusX• 7 years ago

Using the search/filter options on the site is useless now.

Most recently I was looking for a countertop hot plate/burner to replace one that finally broke (filament burned out after 15 years). Searching within the Appliances / Cooktops category, it is filled with random apparel like t-shirts and dresses for < $1. Try filtering by price to any interval and it's random kids' toys, arts and crafts supplies, tools, and sex toys. You're lucky to see one or two actual cooktops per page. Filter by 'Fuel Type: Electric' and there are only 5 actual results plus an impact socket even though there are hundreds of actual electric cooktops if you filter by brand name or surface material. It's insane.

Most of the sellers and brands have names that look like someone mashed their keyboard. At this point the only way to use the site is to already know the exact brand and model you want and search from google.

petra• 7 years ago

> the site is still as unusable as when I first used it.

Maybe it's true, but is there someone better ? with a better search ? more valuable reviews ? As wide selection ?

zamalek2• 7 years ago

Hopefully such a signal doesn't turn the market bearish. There's enough economists saying that we're overdue for a correction and I hope for them to be wrong.

tareqak• 7 years ago

Why do you hope for them to be wrong?

Edit: Fix typo.

killyp• 7 years ago

Are you getting against the market? Cause of not then you probably want it to keep going up.

cm20122• 7 years ago

People suffer in recessions.

ggm2• 7 years ago

isn't there an upside? feels like a return to bricks-and-mortar competition is good, not bad. well.. depends if you own amazon shares or not. Im a non-direct shareholder, my pension fund might have a consequence but I'd expect it to be both sides of this anyway.

totally feels like an upside to me.

martinpw• 7 years ago

a return to bricks-and-mortar competition

That's not what is happening at all. Amazon dominates the ecommerce market, is still growing like crazy, is even still growing faster than the overall ecommerce market, and the ecommerce market is growing faster than the overall retail market.

No return to bricks-and-mortar competition remotely in sight here. It's a pity the spin in the article seems to have been accepted so uncritically in many posts here.

ggm2• 7 years ago

Well, thats a shame then. I might add I believed it because of the false assumption "what I do is what everyone does" and I stopped using AMZN and buy in bricks-and-mortar deliberately for a reason.

I do however, in some cases continue to buy online but from shops direct, not via their Amazon channel.

I assumed the background was this is a "thing" but your story makes more sense: the rate of growth of underlying trends makes a single-line measure "drop" but it isn't what they say it is, its a decline in relative scale.

vernie• 7 years ago

I guess they have to get into the people-making business now.

tyingq3• 7 years ago

I think the poor management of 3rd party sellers is at least part of it. I've had several bad experiences with slow shipping, "out of stock" after the sale, items very much not as described, counterfeits, etc. And crazy bad support from those sellers...English bad enough that I couldn't understand the response.

I now only buy a very specific subset of what I used to buy there.

atomical3• 7 years ago

The letter seems to suggest the opposite.

We helped independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build. There are many such tools, including tools that help sellers manage inventory, process payments, track shipments, create reports, and sell across borders - and we're inventing more every year. But of great importance are Fulfillment by Amazon and the Prime membership program.

tyingq3• 7 years ago

That doesn't say anything definitive either way, does it?

paulcarroty• 7 years ago

I had small, but good experience with 3rd party sellers: next day shipping, free ship from coast to coast. It highly depends from seller, guess.

crazypills• 7 years ago

Amazon has raised the bar to the point that poor experiences that happen under the aegis of the Amazon brand are unacceptable.

mrfusion• 7 years ago

I don’t understand how returns work anymore. I bought something thinking I could return it if it didn’t fit but it turned out the cost to return it was more than the item itself.

It doesn’t seem like they tell you that in advance.

Wheaties466• 7 years ago

that and some items are nonreturnable. Which it does not say on the product page.

jonas21• 7 years ago

It seems that Amazon grew its annual sales by around $50 billion from 2017 to 2018 for a growth rate of "only" 19% (compared with 24% the year before). I'm not exactly concerned for them.

In 2018, Amazon’s nearly $300 billion in GMV was about a 19 percent jump from the prior year. That was notably slower than the rates of increase of 24 percent and 27 percent, respectively, in 2017 and 2016.

hedmundson• 7 years ago

Seriously, and they grew faster than the ecommerce category as a whole. Plus, double digit growth in the 100’s of billions of GMV is incredible in its own right.

randomacct38473• 7 years ago

Shopping on Amazon has become like shopping on Canal Street in NYC (e.g. street lined with shops selling counterfeit goods). You never know what you’re going to get.

benjaminwootton• 7 years ago

I honestly think this is overblown on HN. We must have placed more than 100 orders a year as a family for approaching a decade, and I don’t think we’ve ever had a counterfeit. Not sure if it’s different in the UK.

Alterlife• 7 years ago

There's definitely a problem with fake or badly made goods on Amazon India. Scanning through some of the phone reviews a significant percentage of reviews will be talking about having received refurbished goods.

I bought my iphone from Flipkart (another online retailer in India) because there were multiple reports that Apple will sometimes not honor the warranty for iphones purchased from Amazon

randomacct38473• 7 years ago

It is definitely not overblown. Easy to do simple searches on Amazon and compare to a site that doesn’t rely on 3rd party sellers like Best Buy. If you searched “wireless headphones” the top results are all knock off airpods and other suspect cheap Chinese made electronics with thousands of likely fake reviews. It’s a joke

jesseb• 7 years ago

Yeah I'm in the same boat. Easily over 100 orders and everything has been great, other than the occasional item damaged from shipping (which isn't exactly their fault). I am in Canada, though.

traek• 7 years ago

I thought so too, but I’ve had (non-tech, non-Bay Area) friends start ordering household items from Target instead of Amazon because of experiences like knockoff nail clippers and purple shampoo.

It could just be my circle of friends, but from my vantage point it feels like Amazon is starting to do serious damage to their brand.

superhuzza2• 7 years ago

Definitely not overblown. I personally know people who have ordered sports equipment from Amazon and found it be fake. Extremely dangerous because some of it was climbing equipment. Luckily they were wary of the Amazon goods, got refunded and went to the MEC instead.

"Firstly, Amazon commingles fake and genuine goods in their warehouses. Here’s what happens: You buy a real Arc’teryx jacket, paying the full price, from an approved Arc’teryx retailer selling on Amazon, but you get shipped a substandard copy. This occurs because, in the warehouse, the “same” items have identical internal reference codes independent of the retailer."

https://www.climbing.com/gear/counterfeited-how-illegal-knoc...

aussiegreenie• 7 years ago

You did receive fake goods. About 3-5% of all sales are counterfeit.

olliej2• 7 years ago

It’s always weird to me when this kind of things is treated as bad news: they haven’t said they’re shrinking, literally that they aren’t growing as fast. I mean I don’t particularly like amazon but this kind of reporting irks me.

nerpderp82• 7 years ago

The market demands more. It isn't reporting it is expectations.

olliej2• 7 years ago

the market is stupid.

:D :D :D (I recognize that we're in the realms of irrationality of the market)

ww5203• 7 years ago

Because the stock price has factored in the growth. A slow down in growth means the stock price has to come down. It is bad news for the stock holders.

speedplane• 7 years ago

Because the stock price has factored in the growth. A slow down in growth means the stock price has to come down.

Not necessarily. Maybe the market has factored in a slow-down in growth.

FranzFerdiNaN• 7 years ago

Capitalism demands neverending growth, despite loads of limitations that make that physically impossible. Marx already recognized this, but 150 years later we're still pretending this is not the case.

Retric2• 7 years ago

Capitalism does not require growth. Many markets are stagnant or even shrink as technology evolves. Capitalism incurages growth, but does not require it.

Nasrudith• 7 years ago

It reflects general unreasonableness of expectations and trying to have it both ways.

Giants like Amazon have a lot more inertia than a small business. That means they won't experience even 25% quarterly growth but wouldn't see a complete loss of assets and would probably take decades to die even with a complete idiot or active saboteur in charge.

As opposed to say a one man lawn service that can lose everything if the loaded truck was hit by a tractor trailer.

Osiris• 7 years ago

Don't investors realize that mathematically, a business cannot grow at the same rate forever?

2_listerine_pls• 7 years ago

The question to ask is whether it's due to internal or external factors such as market saturation.

hunter23• 7 years ago

Of course they do, they just value you differently. When companies announce slower growth it impacts their valuation because it impacts the discounted value of their future cash flows.

refurb• 7 years ago

Exactly. You can think of the stock close price as having two components:current value + expected future value (of cash flows).

If a company grows more slowly, you’ll see the 2nd decrease, but the first will stay the same.

vm• 7 years ago

This piece wasn't written by investors. It was written by two opinion columnists at Bloomberg, the same publisher that refused to retract its widely refuted story about the Chinese government hacking Amazon & Apple.

That aside, sometimes people post stupid things on the internet.

a13n• 7 years ago

Not with that attitude ;)

randomacct38473• 7 years ago

I think the market has already realized that Amazon retail is beatable. There’s been a resurgence in stocks that were once falling like a knife because everyone thought Amazon would destroy them...among them Best Buy, Etsy, Shopify, etc.

digitaltrees• 7 years ago

Now begins the monopoly, rent seeking, price hikes.

snrji• 7 years ago

It's time for massive M&As.

cs7022• 7 years ago

Amazon is doing great... but its stock price now seems much riskier.

This is because many self-professed "growth investors" head for the exits, swiftly and silently, the moment they get a whiff that growth is slowing down.

koreyb• 7 years ago

The growth numbers to keep an eye on aren't ecomm, it's AWS and Prime subscriptions.

cs7022• 7 years ago

I would say keep an eye on the whole top line, not just those two contributors to revenue. And also, watch out for any warning signs in the industry suggesting that cloud services are starting to become utility-like (low-margin, capital-intensive) businesses. That would not be good for AWS.

iambateman2• 7 years ago

I wonder if Amazon’s days as the de facto online retailing site are numbered.

For nearly everything I buy on Amazon now, I wonder: “is this real? Are these reviews real? Will it break in 10 minutes?”

Obviously, Amazon is doing just fine, and we are a long way from my parents asking those same questions, and they have tons of businesses beside retail. So yes, they’ll be ok.

But I think they’ve left the door open for competition with their approach to third party sellers.

Innominate• 7 years ago

This is my concern as well. They're becoming victims of their own success with knockoffs and scammers increasingly gaming the system. Everything from knockoffs piggybacking on real listings, to entire lines of products being dominated by no-name Chinese companies throwing armies of shills at the reviews.

Amazon figuring out how to deal with the problem is critical for their future.

my_username_is_• 7 years ago

They've had a long time to figure that out. It's been an issue for a while. They've just neglected to do anything about it.

It doesn't take a genius to look at all the reviews that some products have and realize that they're fake

skohan2• 7 years ago

Who in your mind could replace them? I am sure they have issues, but it seems like they have such a massive lead in terms of logistics it's hard to imagine anyone delivering a comparable customer experience anytime soon.

iambateman2• 7 years ago

I don’t know, but that’s how people felt with Yahoo, AOL, IBM, etc at different times.

A few ideas:

Walmart. Their grocery delivery service is already baked into our weekly workflow. Plus they benefit from having X000 stores around the USA. They really are getting their act together.

Wayfair and friends. Wayfair is demonstrating that certain verticals really benefit from having a dedicated site and customer service matters.

rongenre• 7 years ago

I'm noticing that there's a lack of hot products that I "must have" and would jump onto Amazon to buy. Lately my consumption is largely driven by stuff I have wearing out -- this wasn't the case a few years ago.

aiphex• 7 years ago

I see Amazon now like Aliexpress with a worse UI. Side note - I got an Amazon.ca Visa 4 years ago. Then two years later I got a letter saying in a month or so they (Chase and Amazon) were ending the card service. So I was a student stuck with paying off the card without access to the credit I had factored into my budget while I was in school. I wasn't impressed. Haven't shopped on Amazon since.

Jeff Bezos has confirmed Amazon’s growth is slowing

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