This year, Amazon celebrates its 25 years of existence. Today, many of us wonder how we used to cope before Amazon existed. Yes, we did cope without it, and in the past 25 years several companies were set up in direct competition with Amazon, while very few suppliers do not now entertain the possibility of online shopping. As such, in effect we can cope without Amazon as there are many who can take its place. However, the brand remains a household name.
What is also interesting about Amazon is that, while it enjoys high brand recognition and positive perceptions on the consumer side – this year, Amazon has displaced fellow tech companies Apple and Google, to take top spot in the BrandZ ranking of the 100 most valuable global brands – it does not have a good reputation as an employer and as a corporate citizen.
It was reported that in 2017, Amazon UK paid only £1.7 million in corporation tax despite its pre-tax profit tripling to £72 million. Many also wonder why the company’s profitability is this low when turnover in the United Kingdom for 2017 rose by 35 per cent from £1.47 billion to £1.98 billion.
On the employer front, Amazon also suffers. This is not so much because of the wages they pay. Indeed, their hourly rate in the UK is said to be higher than the real living wage benchmark. The criticism levelled at Amazon as an employer comes more because of some of their labour practices.
Irrespective of this, there is no doubt that Amazon and other companies like it, as well as online retailers, have changed our shopping habits drastically. Many local retailers attribute a drop in demand for their products to the increased incidence of online shopping in Malta.
We have a Big Brother watching over us every day
Misco had conducted a survey on social media usage to understand this phenomenon. The survey showed that as many as 60 per cent of the total population aged 16 years and over shop online. The main product bought online is clothing, footwear and accessories, followed by flight tickets for leisure purposes; hotel stays for leisure purposes; cinema, concert, sports events, theatre tickets; gifts and cards; and make-up, beauty care products, healthcare products, personal care products.
Admittedly nowadays we do not need Amazon to purchase many of these products and services online, as we buy them directly from the provider. However, I wonder whether this would have become possible without Amazon, which in effect has come to represent the whole universe of online shopping as a brand.
In fact, the growth of Amazon has contributed to a change in the way we look at the internet, and in particular, social media. We evolved our approach to the internet from a passive one to a more interactive and pro-active one. There are more people who shop online than there are people who listen to music, or watch video content, or play games on internet.
There is a great deal of talk about tech companies who pay so little in tax in spite of the huge profits they make. Invariably Amazon is listed as one of them, as is Facebook and Google. These and other companies like them have been disruptive in that they have contributed to a change in lifestyle and personal behaviour. A number of them have also been guilty of some malpractice or other. The case of Facebook and Cambridge Analytica could be just the tip of the iceberg.
We used to be afraid of Big Brother (the symbol of George Orwell’s book Nineteen Eighty-Four) watching over us and controlling what we do, when this Big Brother was possibly government. We should not ignore the fact that today we do have a Big Brother watching over us every day, and it is not government but tech companies. And Amazon is one of them, no matter how convenient we all find it to shop online.