How is Amazon Adapting to Overcome Recent Challenges and Fears?

The home delivery, e-commerce company Amazon has faced growing scrutiny over its recent business policies, but has continued to deliver changes, preventing an all-out demise, for now.

The company has recently faced disappointing revenue reports which were far behind expectations, despite the bullish market which fueled a dramatic rise in share price.

Amazon was built up as the pioneer of AI technology, having integrated AI into its Alexa products far before many other companies did so. Having sold these at-home AI-powered devices for very low prices, many investors gave the company a shot in producing a significant return, pointing to the company's strong reputation and momentum in the market.

However, these poor Q2 earnings for Amazon reduced trust from its shareholders, leading to a massive sell-off which consumed not only Amazon, but other companies in the market, including the notorious Tesla, which like Amazon reported underwhelming results.

A wave of unforeseen and heavily consequential world events are to blame. The company's CFO, Brian Olsavsky, argued, “Customers only have so much attention when high-profile things happen, or the assassination attempt a couple of weeks ago, you see that people shift their attention to news. It’s more about distractions.” In other words, subtle events discouraged consumers from buying Amazon products.

This is not the simple truth of why Amazon's revenues declined. Amazon produced abysmal results in developing its market outside of the West, especially in India and China, where the company funded little into expanding in those emerging markets through subsidiaries or mergers. Furthermore, Amazon is facing scrutiny for wiping competition in the AI market by acquiring huge stakes in key AI companies such as Anthropic. Even worse, other e-commerce sites such as Temu and Shein have proved formidable opponents in the market as they have consumed a huge amount of Amazon consumers with their much lower costs.

To combat this financial crisis, Amazon has put into effect new company-wide changes. It recently announced changing expectations of employees to be much higher, rewarding merit much more frequently to lock up strong management of the company. It has also sought connections with social media companies such as TikTok to promote its business to a younger audience.