The tech giant, Amazon, is said to have been bankrupting many companies due its monopoly across the world. However, if we carefully scrutinize all those companies that were bankrupted while coming in way of Amazon, we’ll get to know how they were basically destroyed by their own leadership and managerial issues. It’s true that Amazon played a major role in eradicating many companies from its way, but it’s what every company does basically. It’s the natural phenomenon. Furthermore, we’ll discuss the 5 companies that went or are in serious trouble due to Amazon entering the market.
1. Target
Target was serious disturbed when Amazon acquired Whole Foods back in 2017. The stock price of target were in serious trouble and it was on its knees against the top-notch organizations – Amazon and Wallmart.
To tackle the falling market share, Target introduced the next day delivery service and added various other categories and items to its stores. The counter proved to be somewhat lucrative for target, luckily it was saved from getting lost in the shadow of the tech giant, Amazon.
2. Foot Locker
It is also one of the many companies severely affected by Amazon’s prevalence across the world. Last year in the Q1 the company’s revenue had fallen to 17% in a day due to similar products available at various stores across the internet. At the same time, the huge earning product of Foot Locker, Nike also switched ways to Amazon and began selling at the online store where it is said to have increased its overall earnings.
This was the huge blow to the Foot locker and many other small companies working under it. What’s more, in June 2018, the stock price of Foot Locker had fallen down to 29% from 78.81 in Jan 2018. The company suffered a huge loss while having to forcibly close its 110 outlets.
3. Etsy
Etsy is a boutique brand and an obvious target of Amazon in hand made products. Amazon launched its hand made products back in 2015 and with the continuous rising in sales, the Etsy was ultimately targeted by Amazon in the long run. With few exceptions, Etsy however continued with good earnings for a short period, but then a nightmare happened following to Supreme Court ruling.
Supreme Court stated that the states can now collect sales tax from online marketplaces. The ruling did not much hurt Amazon as it did Etsy, which was on its knees against the tech giant, Amazon. Because Amazon was already collecting the sales tax from its third party seller, the ruling didn’t affect much to the company, However, Etsy was severely affected following to decline in overall revenues.
4. Payless
The company went bankrupt in April 2017 following to the arrival of a number of online stores, mainly Amazon which had severely outranked most of the online stores. The stores traffic in the Mall and everywhere else went to decline and people gradually got used to of buying online rather than walking into a mall or any other store. Also, the reason behind bankruptcy was not only the hassle free shopping but also the online stores charged less or equal in comparison to traditional malls or stores that usually charge a lot more than actual price.
5. Best Buy
It is one of the few companies across the world that has been standing strong against Amazon, which of course have drastically been increasing its growth rate, but Best Buy does not seem to be an easy rival. Against the popular Amazon, Best buy is working hard to bring up unique offering products. With only few percentage in overall growth rate, Best Buy is terribly competing with Amazon whose sales rose to 28% in 2015. Unluckily, Amazon couldn’t completely destroy the Best Buy but still it put a severe dent on its earning potential and overall revenue.
At the last, Amazon has recently entered the Pakistani market by acquiring Daraz.pk which is said to be the Pakistan’s no. 1 online marketplace. The toughest rivals it will be facing in Pakistan are Telemart and Homeshopping. Let’s see how the rivals react to the tech giant Amazon.
Let us know in the comment section what are some more companies that Amazon could compete with?