Amazon CEO Andy Jassy On Chinese Competition, Prime Day And More

E-Commerce behemoth Amazon.com, Inc. AMZN continues to steer its $1.2 trillion ship with a focus on efficiency, long-term investments and an eye on the horizon.

A Thursday CNBC interview featuring CEO Andy Jassy provided valuable insights into its operational strategies, growth opportunities and outlook.

Prime Day, Bigger, Better, More Inclusive: Jassy opened up about the anticipated Prime Day, scheduled for July 11 and 12, saying it will feature the most deals ever across every category.

In addition to the traditional Amazon deals, the company is extending the opportunity to third-party merchants outside of Amazon to offer Prime Day deals. The move allows these merchants to offer Prime customers the ability to checkout with their Prime benefits, giving customers a broader array of discounted items and also acts as a driver for new Prime subscriptions.

Fastest Shipping Times Ever In 2023: Addressing the issues of the supply chain and logistics, Jassy said Amazon is shipping products faster than ever before. He expects 2023 to have the fastest shipping times for Prime customers in the company’s history.

Amazon has placed an emphasis on speed and efficiency in delivering orders recently, as the company spent the past year reevaluating every part of its fulfillment network and shifting the U.S. network from a national to a regional model.

The result has seen more stock build up at local fulfillment centers — closer to end users — which ensures products reach customers much faster. Faster delivery results in happier customers, lower transportation costs, and a reduced environmental impact, Jassy said.

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Addressing Regulation, And Competition In China: When asked about potential competition from Chinese e-commerce companies offering significantly cheaper deals, namely Temu, owned by PDD Holdings Inc – ADR PDD, Jassy emphasized understanding the reason behind the regulations — one of which is most anything less than $800 packaged, addressed and shipped to individual buyers to the U.S. skirts taxes — warning against hasty decisions that could unintentionally hurt U.S. consumers by increasing prices.

Growth Challenges Amidst Uncertainty: Reflecting on the past two years, Jassy acknowledged that leading a company such as Amazon during a global pandemic, a labor shortage and economic uncertainties was a challenge unlike any other.

He expressed a passion in his work and the mission of Amazon, saying the company controls about 1% of the global retail market segment, with a significant 85% of the retail industry still based in physical stores.

Amazon’s retail business is expected to grow beyond its present $470 billion valuation as it capitalizes on the global shift from physical to online shopping — a trend Jassy is confident will continue.

Similarly, Amazon Web Services (AWS), with an impressive $85 billion revenue run rate, is well-positioned to capitalize on the shift from on-premises IT operations to cloud services. Jassy noted that more than 90% of the global IT spend is still on-premises.

Jassy mentioned Amazon has a roadmap of initiatives planned for the next three to five years aimed at ensuring it maintains its trajectory of growth and customer satisfaction.

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Photos: Courtesy Amazon; Unsplash