The era of Amazon comes to an end

Amazon shares fell more than 12% before the weekend after the retail giant reported a slowdown in sales growth in the second quarter, adding that consumers were looking for cheaper options to buy. 

The company's shares were trading at around 165 dollars, among the biggest losers on the Nasdaq index. Amazon is expected to lose about 188 billion dollars in market value if the losses continue. 

"It appears that the consumer spending trends experienced by its retail peers have finally weighed on Amazon's profit and loss," Michael Morton, an analyst at MoffettNathanson, told Al-Arab.  

Amazon's online shop sales rose 5% in the second quarter to 55.4 billion dollars, compared with 7% growth in the first quarter. 

Competition from Temu and Shein has intensified in the e-retail field, as the two companies sell a wide range of products at cheap prices directly from China. 

Large companies and digital platforms are engaged in fierce competition to gain market share and attract consumers. This competition is evident in many aspects, including discount offers to attract consumers, who are looking to find the best deals available online. 

Companies are investing in the development of new technologies and innovations to improve the online shopping experience, using artificial intelligence and digital marketing, which are now playing an important role in this context. Companies are trying to improve delivery services and provide a convenient experience for users by focusing on speed and efficiency in delivery, which are two factors that play an important role in attracting customers. 

For their part, shoppers are looking to find a wide variety of products and brands. Companies try to meet these needs by providing a diverse variety.  

In recent years, especially after the coronavirus pandemic and the quarantines imposed around the world, we have witnessed consumer interest in shopping through social media platforms such as Instagram and Facebook. Direct shopping methods have developed from these platforms, allowing users to buy products through advertisements and posts directly. 

To make online shopping more engaging, companies are using augmented reality and virtual experience technologies, where consumers can get a better preview of products before purchasing them.  

On the other hand, interest in sustainable products and companies committed to social responsibility is growing. Consumers are looking for brands that care about the environment and society. With the growth of artificial intelligence applications, companies have turned to the use of graphical analytics and artificial intelligence to understand consumer behaviour and improve the consumer experience, as offers and advertisements are personalised to customer preferences. 

Voice assistants such as Amazon Alexa and Google Assistant are increasingly being used to shop, search for products and purchase them using voice commands. 

Shopping is no longer limited to the country in which the customer lives. Today, consumers can shop at online shops in other countries, as international shipping and cross-border trade represent options available to users with the growth of decentralised commerce, while the use of blockchain technology enhances security and transparency. 

These developments, which have become part of a sustainable phenomenon in e-commerce and have contributed to improving the consumer shopping experience, were pioneered by Amazon in 1994 in the city of Bellevue, Washington state, where initially it was selling books online. It later expanded to include the sale of software, electronics, video games, clothing and furniture, and more.  

Today, Amazon is the world's largest online retailer by total sales in a sector that is growing in value every day. This has forced high street shops in major cities to embrace online marketing. 

Globally, the online retail market size reached approximately 3.35 trillion USD in 2019 and is expected, according to strategic analysts, to reach 6.27 trillion USD by the end of 2024. The figure is likely to grow to 8.48 trillion USD by 2029. 

This growth reflects the increased use of the internet and mobile phones, as people can now easily and conveniently shop online. These trends represent a shift in the quality and culture of online shopping and make the experience more complete and interactive. 

However, Amazon faces competition that is growing by leaps and bounds. The competition, which has wiped out 12% of the company's share value, interests consumers and puts in their hands, with just a few clicks, multiple options to benefit from competitive prices and better services.