The end is nigh – Amazon is coming

Today, Amazon turns 20. When it first started out, stories of large companies taking over the world via the internet were the stuff of sci-fi movies, with a ‘Back to the Future’ kind of unbelievability – 20 years on, however, they are alarmingly close to the truth.

Nicknamed the ‘Gang of Four’, Amazon, Google, Facebook and Apple have spread their tentacles further than anyone could have imagined. Google log everything you are curious about, Apple know your location every minute of the day and Facebook knows exactly who your ex’s new girlfriend is, because you’ve stalked her so often that they are now suggesting you add her as a friend.

Yet still, these companies are continuing to expand. Not content with being the leading e-retailer in the US, specialising in media and electronics, Amazon has now decided to expand into food delivery. From a consumer’s point of view, this may seem like a good thing – who wouldn’t want to One-Click order a curry at the same time as buying their husband’s birthday present? However, Amazon’s decision will be met with fear by many smaller companies. Much like a large predator encroaching on their turf, for many small businesses, it could mean death.

One such company is Just Eat, who have thrived since floating on the London Stock Exchange last year. Just Eat is based on the idea of helping independent restaurants thrive in a world dominated by chain restaurants – in order to stay competitive against the big chains, they willing to give up a chunk of their revenue to a tech-savvy middleman who can channel more food orders. Sadly, however, it seems that Just Eat’s time in the limelight is unlikely to last in the face of growing big company dominance; if Amazon and Google decide to expand into an industry, there simply isn’t room for anyone else.

“Just Eat is riding high on a theme that has now fully run its course,” said Cyrus Mewawalla, a London-based analyst at CM Research, who recommends selling the stock and ranks it the 6th most expensive among 41 e-commerce companies his firm tracks globally. “Within five years you’ll be able to order a hamburger through Amazon and have it delivered to your front door.”

To me, this seems a shame. Just Eat has gone from a Danish basement startup to the London Stock Exchange over the past decade; only to be shot down by a larger company as it gets into its stride. Amazon has a history of gaining control of industries that it moves into; it has already used its vast influence to almost annihilate the publishing industry, paying authors so little for their books that they are forced to turn to crowdfunding sites like Unbound just to make a living. Clearly, the same can be expected of takeaway food. Amazon will use their influence to drive down prices at participating restaurants so that they barely break even; but with the potential of Amazon’s large customer base, they just can’t afford not to take part.

Having a world market dominated by a select few companies, we risk creating a monopoly that crushes entrepreneurial spirit and kills competition needed for a healthy economy. Who in their right mind would set up a business to compete against Amazon, with their impossibly low costs and impressive logistics? No one, I should imagine; and therein lies the problem. If things continue as they are, it is no exaggeration to say that the ‘Gang of Four’ may well have the opportunity to rule the world.


Miranda Wadham

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