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Amazon joins the trillionaires club

Amazon briefly became the second US company to join the trillionaires club overnight.

Like Apple just one month ago, Amazon’s market capitalisation has exceeded US$1 trillion.

Neil Saunders, MD of GlobalData Retail, described the achieved as “extraordinary” after just 24 years in business.

“That Amazon has achieved this demonstrates its dramatic advancement in both the retail and technology sectors, as well as the influence it now wields over large parts of the consumer landscape. Amazon is a very customer-centric retailer that has earned and deserves its success.”

The e-commerce behemoth posted losses for many years when it launched in the relative infancy of the online shopping industry. But in recent times its growth has been stellar, based on creating a subscription platform (Amazon Prime), developing smart devices like the Alexa and acquiring and opening retail businesses to expand its reach offline, including upmarket grocer Whole Foods and its cashierless Amazon Go format currently in trial phase.

Saunders said the valuation reflects the forward potential of the company. “Despite its size and scale, there is still something young about Amazon. It might be mature in a sector like books and media, but in categories like grocery and home furnishings, Amazon is really only just getting started. The same applies to geographic expansion – there are many global pockets of demand that Amazon has yet to fully tap into.”

Saunders has no doubt Amazon will make the most of all of those opportunities.

“We also believe it will move more heavily into new areas like pharmacy and healthcare. Its future success will be predicated on the same basis as its past victories: finding innovative ways of delivering on customer’s needs and identifying unique ways of solving their problems.”

Apple was not the world’s first trillionaires club member: Chinese government-controlled company PetroChina briefly reached a stock market value of about $1.1 trillion in 2007, however it is now worth only about $200 million.

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