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Will Amazon Wind Up Owning All of Ecommerce?

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Shopping at the local mall

Everyone knows the story of the Three Little Pigs. They each had a house, and each felt safe until the Big Bad Wolf turned up. This fellow started with a clear statement of intent; he was there to eat the pigs and didn’t care how many buildings he had to demolish without proper permits to do so.

Sure enough, he blew down the first house (made of straw, which was not up to code at all), and the first little pig ran to the safety of his brother’s house made of sticks, which is again not a recommended building material.

Once that house was blown down, they all took refuge in the house of brick that belonged to the third little pig, who had taken a construction course at the local community college. The wolf couldn’t blow it down, so he came down the chimney instead.

Who’s Afraid of the Big Bad E-commerce Retailer?

Amazon is currently the “big bad wolf” of e-commerce, responsible for roughly half of all e-commerce transactions. To put that into perspective, the second-largest e-commerce website (eBay) is responsible for just over six percent. The question is, where does it stop? Will e-commerce eventually become nothing but Amazon?

It seems possible, as no one has mounted an honest challenge to Amazon’s dominance so far. The pace of their growth has yet to slow as they continue to gobble up more of their competitors, blowing them out of the way as if they’re made of straw or sticks.

However, current dominance and an unbroken string of growth is no guarantee that success will continue. Much like MySpace was the unquestioned king of social media until Facebook began, it’s likely that we will see a competitor rise to take some of that market share for themselves, possibly unseating Amazon from the throne in the process.
A New King?

For that to happen, it will take an innovative approach to e-commerce, and will most likely come from a company that is currently unknown to many, if it even exists yet. For Jeff Bezos’ creation to be slowed or stopped on the way to complete dominance of the e-commerce world, it will take disruption of that world.

Disruptive market strategy rarely comes from existing companies; Amazon has used that in their favor so far, but as they grow larger, the chance that someone will use the same disruptive thinking against them grows. They’ll need to remember to block the chimney.