Categories investment and innovation

Amazon Almighty : what will stop the all market disruptor?


France 24 - Guillaume Villon de Benveniste - 1200 milliards sur la table - Michalon - Author

The Debate on France 24

On December 24, 2018, I took part in “The Debate” of France 24, the French BBC. With a few other experts, we talked about the long view on Amazon and we wondered whether the company was overvalued, and how it is changing our day-to-day lives. I will not go into the details that we discussed during the show.

Amazon almighty - How far will the e-commerce giant go
Amazon almighty – How far will the e-commerce giant go

The question of Amazon’s valuation

But I would like to just outline a few ideas on the question of Amazon’s supposed over valuation. Amazon is making approximately $178 billion sales as of 2018 and employing a little less than 600,000 people. Last year, the company generated $2.5 billion in profit. Plus, the Seattle-based retail giant is investing $22 billion and research and development; that’s more than any Fortune 500 player in the world.

Ranking of the 20 companies with the highest spending on research and development in 2018 (in billion U.S. dollars)

Ranking of the 20 companies with the highest spending on research and development in 2018

But what’s most interesting about Amazon is Jeff Bezos’ choice to put customer satisfaction ahead of any other priority. In his first letter to shareholders, Jeff Bezos says that investors will have to wait before they get dividends paybacks should they buy Amazon stock. In fact, the company was able to attract over $1.3 billion before making a profit. What does this mean? Today, New York and Silicon Valley, decision-makers take the long-term view and forgo returns to build a promising organization. There are perhaps no other places in the world that concentrate similar amounts in capital and differ dividends for so long to create the business of the future. Who said that US investors are only in for short-term gains?

Amazon and job creation

Another striking questions about Amazon is whether or not it’s destroying jobs. Walmart is making $500 billion in sales and working with 2 million people. Its online competitor has 600,000 people and generating $175 billion in sales. In other words, the ratio of sales per employee is approximately similar. Amazon and Walmart are making similar amounts in sales per employee. So what? So… Amazon may not be destroying jobs after all. Plus Amazon salaries seem higher than those at Walmart. It looks the online giant is creating higher compensation jobs.

Turning France into the Silicon Valley of 2030

Could France be the Silicon Valley of 2030 – Francois Picard – Guillaume Villon de Benveniste – France 24

The Host of The Debate, François Picard, asked me if France could become the Silicon Valley of 2030. And, as I show in my latest book, I really believe it could if…

… we invest more in innovation

… we make better innovation investment decisions

… we improve innovation capital efficiency

… we improve our understanding of customer needs, especially those that are part of the Global Middle Class

… we develop innovative use cases leveraging value-creation technologies : there’s $1210 Bn up for grabs

The complete show is avaiable here :

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