Jeff Bezos, his controversial empire, and his plan to take over Australia

Nick Whigham
NOVEMBER 7, 2016
news.com.au
Amazon to Open Grocery Stores, Curbside Service
THE average Australian probably doesn’t know much about Jeff Bezos but the billionaire internet mogul who frequently draws comparisons to Steve Jobs is about to emphatically introduce himself.
And it’s an introduction likely to have a lasting impact on Australian consumers and our roughly $300 billion dollar retail market.
First and foremost, Jeff Bezos is the founder and chief executive of Amazon.com — the online retail and delivery service that has become a monolithic e-commerce giant in the US.
The company has plans to expand into Australia next year as its 52-year-old leader with a net worth of $85 billion looks to expand his reach even further.
While Amazon does have an Australian portal for its online marketplace, those who use it are often faced with huge shipping fees and the disappointing message that “this product is not available in your country.”
But now the company is looking to establish warehouses, local suppliers and distributors as it makes the move to fully enter the Australian market.
Once obsessed with the growth of the internet in its early days, Bezos has dedicated himself to positioning his company to take full advantage of it, and in doing so has founded an empire.
And we’re next on the hit list.
‘HURTLING TOWARD WORLD DOMINATION’
Amazon.com started off selling and delivering books online before growing to sell practically everything under the sun. Amazon’s online store remains the centrepiece but the company has branched out into other areas including tech products, computing services and content creation.
It has a staggering $US1 of every $US2 of e-commerce sales in the country and its market share continues to grow. In August Amazon surged past Exxon Mobil to become the fourth-largest US company by market capitalisation.
Amazon was valued this year at $US350 billion. More than the GDP of Hong Kong.
Jeff Bezos has always prioritised investment and expansion over profits, and as such Amazon has continually poured its money into new endeavours rather than provide juicy profit margins for investors.
But praise for the company’s immense growth is never far from discussion about its enigmatic founder and the somewhat controversial culture of the retail giant.
If you’re not convinced of the immense spell Amazon has cast over America, and the ambivalence many in America hold about its dominance, consider a description of the Bezos empire in a Newsweek article earlier this year titled; How Jeff Bezos is hurtling toward world domination.
“The company is lodged deep into our culture, a complex creature that engenders equally complex emotions,” the magazine wrote.
And sometimes those emotions can be unsettling.
THE ICK FACTOR
In 2015 The New York Times published an explosive article about the workplace culture at Amazon, which amounted to an experiment being conducted by Bezos to see how far he could push his staff in order to realise the ambitious goals of his company.
The investigation which interviewed more than 100 employees revealed stories of sleepless nights, immense expectations, employees crying at their desks, and a cutthroat culture that ranked workers and saw a periodic culling of those that found themselves at the bottom of the list.
Amazon railed against the article and claimed the Times had distorted anecdotes to cast the company in an unfairly bad light.
But it was far from the first time Amazon has been painted with that particular brush.
In 2013 author Brad Stone published a comprehensive book about Bezos and his company called The Everything Store. In it he described a ruthless, slave-driving, and sometimes disingenuous Bezos who is prone to throwing temper tantrums and is willing to do anything in the pursuit of driving down prices for customers.
As Fortune noted, “it will make anyone who reads it, regardless of how much they love being an Amazon customer, feel icky about themselves for just how much they enjoy buying things at Amazon.”
In the same year the BBC released an investigative documentary called The Truth Behind The Click which detailed conditions in Amazon warehouses that led to mental and physical illness.
Initially Jeff Bezos wanted to call his company Relentless. He may have opted for naming his company after the world’s longest river, but in the day-to-day practices of his business, his initial sentiment remains.
In fact visiting relentless.com will take you straight to the Amazon homepage. A subtle reminder about the spirit that underpins the Bezos empire.
THE BEZOS EMPIRE
It’s a testament to both the mercurial and ever-evolving nature of Amazon as well as the secrecy that often surrounds the company that in 2011 Wired felt the need to point out that “Jeff Bezos owns the web in more ways than you think.”
In 1999 the US patent office granted Amazon a patent for its “one-click technology” which effectively protects any e-commerce transaction executed with one-click using stored customer credentials to validate the purchase. It has since been licensed to other companies such as Apple but despite a similar patent being rejected in Europe, it’s thought to be worth billions.
Amazon Web Services provides cloud computing services to the likes of the CIA and Netflix, controlling roughly a third of the cloud computing market.
The company recently released Amazon Echo — an artificially intelligent speaker called Alexis which speaks to you and carries out your commands.
As Shahid Khan, co-founder of Mediamorph, recently said on Bloomberg TV; “you cannot dominate the world if you don’t control the living room.”
Amazon has also pushed into creating original content with the launch Amazon Prime in a clear bid to drag customers away from the likes of Netflix and Spotify in order to get a bigger slice of the internet pie.
“When we win a Golden Globe, it helps us sell more shoes, and it does that in a very direct way,” Bezos once said.
Last year Amazon Prime’s original series Transparent won a golden globe. It’s not publicly known if shoe sales went up.
Like any creative billionaire entrepreneur these days, Bezos is interested in space colonisation and has launched his own company called Blue Origin to help in the lofty pursuit. It recently teamed up with NASA to conduct research.
In 2013 he bought The Washington Post for $US250 — 12 years after the newspaper had predicted the financial demise of Amazon.
The purchase was viewed with scepticism by some, prompting fear he would use it as a Washington-based PR tool for his company’s immense ambition. However the inevitable comparison to William Randolph Hearst appear to be misguided as Bezos has proved to be a champion of a free speech and journalism.
Mind you, the paper is arguably less likely to write about Amazon’s notoriously scrupulous pursuit to avoid paying taxes.
THE AUSTRALIAN INVASION
The long expected Amazon expansion is expected to take place next year with the company setting up shop and launching its service in September.
According to Justin Braitling, an investment officer at Watermark Funds Management with inside knowledge of Amazon’s plans, the company “will be dropping distribution centres and performance centres in every state next year,” he told the Australian Financial Review this week.
The launch was originally slated for March 2017 but has reportedly been pushed back to September because the company wants to include fresh produce in its retail offerings.
“They will also be putting physical stores on the ground which I don’t think anyone knows about,” Braitling said.
“We spoke to the guy rolling out Amazon’s business here in Australia and in his words: ‘We are going to destroy the retail environment in Australia’.”
A goal that will no doubt strike fear into the hearts of both small and large Aussie retailers.