The fortune of the richest man on Earth is growing. All thanks to the pandemic
Jeff Bezos, CEO of Amazon, would probably be popping champagne if it weren't for the gravity of the situation the world finds itself in. His fortune has just reached a record value of $138 billion. This happened thanks to increased interest in e-commerce during the pandemic. Clients of the Sopot-based company Nethansa, which brings Polish and German companies onto Amazon, also recorded nearly a 50-percent increase in revenue in March. Is this the beginning of a new boom?
Share price is breaking records
Jeff Bezos, who nearly 25 years ago founded Amazon in his garage – now one of the largest corporations in the world – still owns 11 percent of the company's shares. On Tuesday, the e-commerce giant's shares reached a record value of $2,283 per share, resulting in a total valuation of $1.14 trillion. That is not much less than Apple or Microsoft, and much more than Google and Facebook. Thanks to this, Bezos's astronomical fortune increased by another $6.4 billion.
– The owner of the global e-commerce hegemon is celebrating triumphs. It is said that nature abhors a vacuum and the market always moves toward equilibrium. The same is true of trade. It might seem that closed shopping centers and boutiques would destroy retailers. Yes, but only those whose operations are based mainly on physical points of sale. As Amazon's example shows, companies can still earn money and grow wealthy. One door closes and another opens in its place. Business must keep its eyes wide open. For many companies, the only salvation from the crisis is expansion onto the internet – says Sascha Stockem, CEO of Nethansa.
Gigantic growth
Where do these record results come from?
The online retail giant was described by The Guardian as the "clear winner of the coronavirus crisis." Is it because customers spend nearly $11,000 per second on products and services offered by Bezos's company? Or perhaps it is due to the fact that the Federal Reserve announced it would allocate $2.3 trillion for loans to businesses, intended to support the U.S. economy? There are many factors, and the effect is excellent. Amazon's share price rose by more than one third within a month, and its owner, Jeff Bezos, strengthened his position as the richest person in the world with a fortune of $138 billion.
– Hundreds of millions of people confined to their homes as a result of quarantine and social distancing are using Amazon's services. Shopping, entertainment – today's offering from the Seattle-based corporation is comprehensive. Companies whose employees mostly work remotely also rely heavily on SaaS software and cloud computing, and that too is part of the Seattle giant's offering – says Sascha Stockem of Nethansa.
But that is not the end – on Monday Amazon announced that it will hire an additional 75,000 employees to help handle growing orders. Since the coronavirus crisis hit Western economies last month, the company has already recruited more than 100,000 additional people, bringing Amazon's total workforce to nearly one million! This turn of events does not surprise Sascha Stockem of Nethansa.
– As long as the global isolation of society and the economy continues, Amazon's bull run will continue as well. Therefore, there is nothing surprising about analysts forecasting further gains. Of course, Bezos's fortune will also benefit indirectly. It is predicted that the internet empire he founded will increase annual sales by nearly 20 percent. When the isolation ends, habits will remain, and a large portion of the customers acquired during it will stay with Amazon permanently – believes the expert.
Opportunities online
What does the Polish market make of this?
Does this information have a significant impact on Polish entrepreneurs, who are acutely feeling the effects of the coronavirus? Much is said about government programs supporting the SME sector in these difficult times, but according to the CEO of Nethansa, many companies can arrange real help for themselves. How? By taking advantage of the opportunities offered by modern online commerce. This is an important lesson for all retailers who have so far neglected their online presence. Today, companies that use Amazon's marketplace platform can participate in its profits.
– As the data we have gathered show, compared with January 2020, the companies cooperating with us recorded an average 50-percent increase in Amazon sales revenue in March. In February, it was about 30 percent. The growth dynamics are therefore impressive – says Stockem.
As can be seen, both in the example of Amazon and in that of companies cooperating with Nethansa, e-commerce today is not so much a privilege or an additional asset, but a key distribution channel for goods and services. Considering the perspective of the coming months, it is even the only way to survive for hundreds of thousands of companies that were deprived overnight of the ability to earn money.
Summary
The fortune of Jeff Bezos, owner of 11 percent of Amazon shares, reached a record $138 billion, and the price of a single share of the e-commerce giant rose to $2,283. The lockdown and forced social isolation fueled online sales – customers spend almost $11,000 per second on the platform. Amazon has already hired more than 100,000 additional people and announces another 75,000 jobs. In Poland, according to Nethansa, companies selling on Amazon recorded an average 50-percent increase in revenue in March compared with January 2020. According to experts, some shopping habits will survive the pandemic, and e-commerce will become a permanent and key distribution channel.
