Amazon is a consumer e-commerce platform with a diversified business model spanning across e-commerce, cloud, advertising, streaming, and more. Over the years Amazon acquired several companies. Among its 12 subsidiaries, Amazon has AbeBooks.com, Audible, CamiXology, Fabric.com, IMDb, PillPack, Shopbop, Souq.com, Twitch, Whole Foods Market, Woot! and Zappos.
Amazon has many known subsidiaries, with a culture of mergers and acquisitions starting in the late 1990s after an IPO amid the dot-com bubble.
When many of these dot-com companies went bankrupt in the early 2000s, the company became more cautious and only invested in two companies between 2000 and 2004.
In 2005, however, the strategy recommenced in earnest as Amazon acquired a mixture of media websites and online retailers.
From 2011 onward, the company broadened its focus with acquisitions in the pharmaceutical, live streaming, and grocery industries to name just a few.
While we could never list them all, below is a selection of five Amazon subsidiaries.
Founded in 1980, in Austin, Texas, Whole Foods was born as a natural foods store. In 2017, Amazon acquired it for about 14 billion dollars. By 2017, Whole Foods already had over $16 billion in revenues. It is now integrated within Amazon’s operations, thus enabling it to compete in the fresh food space, combined with Amazon Fresh (a grocery delivery service operating primarily in the US).
Whole Foods Market is a multinational supermarket chain with a particular focus on organic food choices that are free from artificial flavors, colors, and preservatives.
This gave Amazon a significant presence in video games and immersive technology – both lucrative industries that are redefining the ways consumers interact online.
Twitch started in 2007 as Justin.tv, broadcasting the life of Justin Kan, one of its co-founders, used to prove the concept of enabling anyone to broadcast their lives on the web. Once pivoted, Twitch quickly grew, and by 2014 it was acquired by Amazon for almost a billion dollars. Titch now makes money via subscriptions, bits, advertising, and merchandising.
Souq is an eCommerce company that was founded in 2005 by Ronaldo Mouchawar.
Souq operates the largest such platform in the Middle Eastern market, selling millions of products in consumer electronics, healthcare, fashion, and homewares.
Souq became an Amazon subsidiary in March 2017 in a deal worth $580 million in cash.
The acquisition allowed Amazon to further its intentions to become a global leader in eCommerce.
Zoox is an Amazon subsidiary that produces autonomous vehicles in the form of robot-taxis for mobility-as-a-service (Maas).
The company was originally founded by Australian designer Tim Kentley-Klay and Jesse Levison – son of Apple chairman Arthur – who was creating self-driving technology whilst studying at Stanford University.
Amazon has many known subsidiaries thanks to a culture of mergers and acquisitions that started in the late 1990s. Perhaps its most high-profile acquisition was Whole Food Markets in 2017 for $13 billion.
Amazon also owns video live streaming service Twitch and eCommerce company Souq, the largest such platform in the Middle East.
Other Amazon subsidiaries include audiobook platform Audible and autonomous vehicle company Zoox.
Which companies are owned by Amazon?
Amazon owns hundreds of private labels, among which some are branded under the Amazon Basic umbrella. In addition, Amazon acquired AbeBooks.com, Audible, CamiXology, Fabric.com, IMDb, PillPack, Shopbop, Souq.com, Twitch, Whole Foods Market, Woot!, and Zappos.
As of 2021, Bezos owned 12.7% of Amazon. It’s critical to understand that over the years, Amazon took various venture capital investments, and as a listed company, part of the ownership is public. Thus, Bezos retained a significant stake in Amazon, valued at over $100 billion.
Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services, Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!
Amazon has a business model with many moving parts. With the e-commerce platform which generated over $222 billion in 2021, followed by third-party stores services which generated over $103 billion, Amazon AWS, which generated over $62 billion, Amazon advertising which generated over $31 billion and Amazon Prime which also generated over $31 billion, and physical stores which generated over $17 billion.
The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”
The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.
In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
Gennaro is the creator of FourWeekMBA, which reached about three million business students, executives, and aspiring entrepreneurs in 2021 alone | He is also Head of Enterprise Sales for a high-tech startup, which he helped grow at a double-digit rate since the onset | In 2012 Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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