Amazon already holds two-fifths of the online marketplace, but is growing at such a pace, that it will soon by 2021 cover half of it. But the Seattle-based e-commerce giant’s footprint does not stop there, as it has successfully expanded into several other businesses in recent years such as Cloud services, media, B2B distribution and hardware. This vast ecosystem means that Amazon ahs now become central to any due diligence effort made by Private Equity (PE) funds. The Amazon Factor as it is known also translates to a humungous quantity of data warehousing which allows for superior decision making. Such readily available data may be then used by PE funds for performing due diligence operations. According to a study by Bain, Amazon has the highest Net Promoter Score among top retailers across categories. The data advantage that Amazon provides also allows for detailed business analytics operations to be conducted. Future penetration can best be predicted using this as it tracks pricing, convenience to customers and return policies. For those doing due diligence tests, knowledge in each category is vital.

Source:http://www.bain.com/publications/articles/coping-with-the-amazon-factor-in-due-diligence.aspx

Uploaded Date:13 June 2018