親愛的股東:身為CEO,當我開始撰寫第二封年度股東信時,我對亞馬遜未來的前景感到樂觀和充滿活力。儘管2022年是記憶中總體經濟最困難的年份之一,而且我們自身也面臨了一些營運挑戰,但我們仍然找到一種方式來增加需求(在新冠肺炎疫情大流行的前半段,經歷了前所未有的增長)。我們在最大的業務中創新,從而顯著改善了短期和長期的客戶體驗。同時,我們在投資決策和未來發明方式上做出重要調整,同時保留我們認為可以改變亞馬遜未來的長期投資,造福客戶、股東和員工。
儘管過去一年面臨許多挑戰同時發生,但事實上,如果您經營一個大型、動態、全球化的市場區隔(這是亞馬遜所有業務運營的條件),且和許多能力優異、資金充足的對手競爭,環境很少長期保持不變。
在我任職亞馬遜的25年中,一直處於不斷變化,其中許多是我們自己發動的。1997年加入亞馬遜時,我們在1996年實現了1,500萬美元的收入,只是一家售賣圖書的零售商,沒有第三方賣家,只發貨到美國地址。今天,亞馬遜幾乎銷售您可以想像到的每一種實體和數位零售商品,擁有一個充滿活力的第三方賣家生態系統,占我們銷售單位的60%,客戶遍及全球幾乎每個國家。同樣地,2003年開始追求AWS(亞馬遜網絡服務)時,以雲端技術基礎服務來建立業務,在當時並不明顯,而當我們在2006年推出第一批服務時,情況仍然如此。當我們在2007年推出Kindle時,60秒內即可輕鬆獲得幾乎每一本書,並能夠在輕便的數位閱讀器上儲存和檢索,而像Alexa這樣的語音控制個人助理(在2014年推出),可以用於存取娛樂、控制您的智慧家居、購物和檢索各種資訊,這都不是什麼「了不起的東西」。
有時,總體經濟條件或營運效率不佳也會帶給我們新的挑戰。例如,在2001年的互聯網泡沫破裂期間,我們不得不取得信用狀來添購長假庫存,優化成本以實現更好的獲利能力,但仍然優先考慮我們試圖建立的長期客戶體驗和業務(如果您還記得,事實上,在那段不穩定的2001年期間,我們降低了大多數類別的價格)。在2008年至2009年次貸危機引發的經濟衰退期間,您再次看到了這種平衡。我們採取行動來管理零售業務的成本結構和效率,但我們也平衡了這種精簡過程,投資客戶體驗,我們相信這些投資將成為未來具有顯著報酬的重要業務。在2008年,AWS仍是一個相對較小的新興業務。我們知道我們在做某些事情,但它仍需要投入大量資金。公司內外都有聲音,質疑亞馬遜(當時我們主要被視為線上零售商)為什麼要投資這麼多在雲端運算。但我們知道,我們正在創造一些特別的東西,可以為客戶和亞馬遜創造價值。我們已經領先潛在競爭對手了;如果有什麼機會,我們希望加快創新腳步。我們做出了繼續投資AWS的長期決策。15年後,AWS現在是一家年收入達850億美元的業務,具有強大獲利能力,從新創企業到跨國公司再到公部門機構,都改變了他們管理技術基礎設施的方式。如果在2008年至2009年期間我們放緩了AWS的投資,亞馬遜將是一家截然不同的公司。
改變總是在轉角,有時候,您會主動邀請它進來,有時候,它就是不期而至。但是,當您看到它即將到來,您必須擁抱它。那些能夠長期積極應對變化的公司通常會成功。我對我們未來的前景感到樂觀,因為我喜歡我們團隊面臨變化時的回應。
過去幾個月,我們深入檢視公司各個業務和創新項目,並問自己是否對每個項目的長期潛力有信心,能夠帶來足夠收入、營業利益、自由現金流和投資報酬率。在某些情況下,這導致我們關閉了某些業務。例如,我們停止追求實體店概念,如書店和4星級商店,關閉了我們的Amazon Fabric和Amazon Care業務,並放棄了一些新設備,因為我們看不到顯著的回報途徑。在其他情況下,我們檢視了一些未能產生我們希望回報的計畫(例如,所有超過35美元的線上雜貨訂單免費送貨),並進行修改。我們還重新設定資源的優先順序,這最終導致我們做出了裁減2.7萬個公司職位的艱難決定。在過去幾個月,我們做出了一些其他變化,以精簡整體成本,像大多數領導團隊一樣,我們將繼續評估在業務上看到的情況,並進行調整。
我們團隊也仔細思考我們如何共同工作,要求我們的員工從5月份開始,每週至少回到辦公室3天。在疫情期間,我們的員工從家中勤奮地完成工作,盡一切可能應對突如其來的情況。這令人印象深刻,我為團隊能夠共同克服為我們客戶、社區和企業帶來前所未有的挑戰感到驕傲。但我們認為這不是最好的長期方案。我們已經確信,當我們在一起工作並互相學習時,協作和創新更加容易和有效。能量和人們交流彼此的想法會更自由地發生,而且許多最好的亞馬遜發明都是從人們在會議後留下來,在白板上討論想法、在回程路上繼續交流,或者當天晚些時候拜訪隊友辦公室而產生的突破時刻。創新常常是混亂的,它遊走、流浪和醞釀。偶然的互動有助於這一點,在面對面情況下比虛擬情況下更多。當我們大部分時間在辦公室與同事們相聚時,學習、建立、實踐和加強我們的文化也會更加容易。創新和我們獨特的文化在我們成立的前29年中非常重要,我期待在未來29年中仍然如此。
我們一直在面對的一個關鍵挑戰,是我們商店配送網路成本(即將產品從亞馬遜送到客戶手中的成本)不斷上升,我們已經進行了多項改變,我們相信這將顯著改善我們的配送成本和交貨速度。
在疫情早期,由於許多實體商店關閉,我們的消費者業務以驚人速度增長,年營收從2019年的2,450億美元增加到2022年的4,340億美元。這意味著我們必須將我們在過去25年中建造的物流中心規模加倍,並大幅加快建立一個類似UPS規模大小的最後一里運輸網路(以及一個新的理貨中心網路,以提高產品在長距離運輸時的效率和速度),這一切都在大約兩年內實現。這不是件容易的事,數十萬亞馬遜員工非常努力地工作,使這一切成為可能。然而,毫不意外的是,隨著這種變化的速度和規模,還需要大量優化才能實現預期生產力。在過去幾個月,我們審核了我們物流中心和運輸網路中的每條路徑,重新設計了大量的過程和工作機制,從而實現穩定生產力增長和降低成本。還有更多的工作要做,但我們對我們的過往和未來的顯著改善感到滿意。
我們也把握這個機會,進行更大的結構性變革,讓我們更好地實現未來多年的低成本和更快速的配送。一個很好的例子是重新評估我們美國配送網路的架構方式。最近,亞馬遜營運一個全美國的配送網路,從遍佈全國的物流中心發送庫存。如果當地物流中心沒有客戶訂購的產品,我們就必須從全國其他地方發貨,這會增加成本,並拉長交貨時間。隨著我們的物流網路在過去幾年中擴展到數百個附加節點,庫存分布的位置也增加了,這增加了連接物流中心和交貨站節點的有效性與複雜程度。去年,我們開始重新設計我們的庫存配置策略,並利用更大的物流中心,從全國物流網路轉向區域化網路。我們進行了重大的內部變更(例如放置和物流軟體、流程、實體操作),在較小的地理區域中創建了8個互相連接的區域。每個區域都有廣泛且相關的選擇,很大程度上可以自給自足運作,同時仍可在必要時向全國其他地方發貨。一些最有意義和最艱難的工作,是優化這個龐大的基礎設施之間的連接。我們還在不斷改進我們的先進機器學習演算法,以更好地預測各地客戶的需求,以便我們在適當時間將庫存放置在適當地區。我們最近完成了這個區域性的發表,也喜歡初期結果。較短的行駛距離意味著更低成本,對環境影響更小,客戶可以更快地拿到產品。對後者,我們很興奮看到「更多次日和當日送達」,並且計畫在2023年實現史上最快的Prime送貨速度。整體而言,我們對於降低成本、縮短交貨時間、並構建更大、營運利潤健康的零售業務計畫,仍然充滿信心。
AWS現在年營收達850億美元,而且仍處於技術採用曲線的早期階段,在這關鍵時刻,持續關注什麼對客戶來說最重要,是極為要緊的事。儘管2022年在620億美元的收入基礎上年成長29%,但由於目前總體經濟環境的挑戰性,AWS現在面臨短期風險。雖然一些公司可能會在這些艱難時期,試圖從客戶那裡盡可能地多收取金錢,但這既不是客戶所希望的,也不利於客戶的長期利益,因此我們正在採取不同策略。 AWS和雲端計算有許多優勢,其中之一是當您的業務增長時,您可以輕鬆地進行擴張;反之,如果您的業務收縮,您可以選擇把這部分容量還給我們,停止支付相應費用。這種彈性是雲端運算獨有的,當您已經在自己的本地資料中心、伺服器和網路設備上投資昂貴的成本時,這種彈性並不存在。在AWS和我們的所有業務中,我們不打算優化任何一個季度或年度。我們試圖建立客戶關係(以及一個企業),這些客戶關係將超越我們所有人的存在;因此,我們的AWS銷售和技術支援團隊花大部分時間説明客戶,優化他們的AWS支出,以便他們應對這個不確定的經濟環境時做得更好。許多AWS客戶告訴我們,他們不是在「削減」成本,而是在「優化」成本,以便將資源用於計畫中的新客戶體驗。客戶都讚賞這種以客戶為中心、長期的方法,我們認為這對客戶和AWS都將是有益的。
雖然這些短期不利因素降低我們的成長率,但我們非常滿意AWS 的基本面。我們的新客戶源源不絕,同樣地,我們現有的客戶轉移項目也很活躍。許多公司都會在這樣的間斷時期停下來,評估想要改變的戰略規劃。我們發現越來越多企業選擇放棄自行管理基礎設備、轉移到AWS上,享受靈活性、創新性、成本效益和安全性方面的好處。對客戶來說,最重要的是,AWS 繼續快速提供新功能(2022年推出了超過3,300個新功能和服務),並投資於長期發明,改變了可能的定義。
晶片研發是一個很好的例子。在去年給股東信中,我提到我們正在為通用CPU處理器Graviton進行的投資。基於Graviton2的運算實例提供的價格性能,相較可對比的最新一代x86例子高出多達40%;而且,在2022年,我們推出了Graviton3晶片,提供比Graviton2處理器高出25%的性能。此外,隨著機器學習的採用不斷加速,客戶們渴望使用成本更低的GPU(機器學習中最常用的晶片)。AWS幾年前開始為機器學習培訓和推理(推理是機器學習模型提供的預測或答案)投資這些專用晶片。我們在2022年推出了第一個培訓晶片「Trainium);對於最常見的機器學習模型,Trainium-based實例的速度比基於GPU的實例快了140%,還節省成本最高達70%。大多數公司仍然處於練習階段,但是當他們開發出可大規模生產的模型時,他們會發現,大部分的成本是在推論過程中產生的,因為模型通常是週期性訓練,而推論則是在相關應用程式被執行時一直發生的。我們在2019年推出了第一款推理晶片「Inferentia」,它已經為亞馬遜等公司節省了1億美元的資本支出。我們剛推出的Inferentia2晶片提供的輸送量高4倍,延遲時間低達十分之一,這將有助於應對機器學習的巨大增長,讓客戶能夠以更低成本完成更多工作。我們在這裡的創新還遠未完成,這項長期投資應該會對客戶和AWS帶來豐碩的成果。AWS仍然處於其發展的早期階段,在未來10年中有機會實現非凡的增長。
亞馬遜的廣告業務同樣具有很高潛力,對品牌來說效益獨特,這也是它持續快速增長的部分原因。類似於實體零售商的廣告業務銷售貨架空間、頂部位置以及在其傳單的投放,我們的贊助產品和品牌提供已經成為亞馬遜購物體驗的重要組成超過10年。然而,與實體零售商不同的是,亞馬遜可以根據我們對購物行為和深度機器學習演算法的瞭解,調整這些贊助產品與客戶搜索相關的內容。這使得廣告對客戶更有用,因此對品牌的表現也更好。這就是為什麼我們的廣告收入繼續快速增長的原因之一(2022年第四季度年成長23%,2022年基於310億美元的收入基數上,整體年成長25%),即使大多數以廣告為重點的企業增長在過去幾個季度已經放緩。
廣告業務成長幅度驚人
我們致力於成為廣告商建立品牌的最佳選擇。我們有短期和長期機會,將幫助我們實現這一使命。我們不斷投資機器學習,以不斷精進我們的廣告選擇演算法。過去幾年,我們投資於建立全面、靈活和持久的規劃和衡量解決方案,為行銷人員提供更深入的廣告效果洞察。一個例子是亞馬遜行銷雲(「AMC」)。AMC是一個「乾淨房間」(意指安全的數字環境),廣告商可以在其中運作自行定義的受眾和活動分析,涵蓋多種第一方和第三方輸入,以安全保護的方式生成廣告和業務洞察,為更廣泛的營銷和銷售策略提供訊息。廣告和AWS團隊合作,使企業能儲存數據在AWS,在AMC中與亞馬遜和其他第三方數據源安全運作,在AWS中進行分析,並可以選擇通過亞馬遜需求方平台在亞馬遜或第三方發布商上啟動廣告。客戶非常喜歡這種綜合能力。我們還看到,將來有機會將廣告刻意融入我們的影音、現場體育、音頻和雜貨產品中。我們將繼續努力,幫助品牌與正確的受眾獨特互動,並發展這一部分業務。
在動盪時期,專注於現有的大型業務非常誘人,但若要建立一家可持續、長遠發展並在多個維度上幫助客戶的成長型公司,就不能停止創新,不能停止致力於對客戶產生顯著影響的長期客戶體驗。
當我們考慮新的投資機會時,我們會問自己幾個問題:
如果我們成功了,這個機會能否成為一個龐大且有合理資本報酬率的項目?
這個商機是否已經被良好的滿足?
我們有沒有獨特的營運方法?
我們是否在該領域具備專業能力?如果沒有,我們能否迅速獲得?
如果我們對這些問題的答案感到滿意,那麼我們將進行投資。這個過程已經帶來了一些看似直接的擴張,也有一些可能一開始沒有人猜測到的。
最早的一個例子,是我們選擇從僅僅銷售書籍擴展到添加音樂、影片、電子產品和玩具等類別。當時(1998至1999年),這舉動並不是普遍受到讚賞,但回顧起來,這(答案)似乎是相當明顯的。
對於我們國際商店的擴展,情況同樣適用。2022年,我們的國際消費者部門帶動了1,180億美元營收。在我們較大且已建立的國際消費者業務中,我們足夠大,受到全球經濟放緩的影響;然而,在2019年至2021年期間,在一個大的基礎上實現了顯著增長—英國的年複合增長率(CAGR)為30%,德國為26%,日本為21%(不包括匯率影響)。在過去幾年中,我們在印度、巴西、墨西哥、澳大利亞、歐洲各國、中東和非洲部分地區等新的國際位置進行新的投資。這些新的國家需要一定的固定資本支出才能啟動和擴張,但我們喜歡它們的發展軌跡,它們當地的增長模式,與我們在北美和已建立的國際地理位置所見相似。新興國家有時缺乏我們業務所依賴的一些基礎設施和服務(例如支付方式、運輸服務和互聯網/電信基礎設施)。為了解決這些挑戰,我們繼續與各種合作夥伴合作,為客戶提供解決方案。最終,我們相信,這種更廣泛的地理覆蓋範圍的投資將使我們幫助全球更多客戶,並建立一個帶來更大自由現金流的消費者業務。
除了地理擴張外,我們一直致力於在一些大型、獨特的產品零售市場領域擴展我們的客戶產品。單單在美國,雜貨市場規模就有8,000億美元,平均每個家庭每週購物三到四次。亞馬遜在近20年間建立了一個有些不尋常,但相當重要的雜貨業務。類似於其他大型雜貨商在1980年代進入雜貨領域的方式,我們逐步增加通常不需要溫度控制的超市產品,例如紙製品、罐頭和包裝食品、糖果和零食、寵物護理、健康和個人護理以及美容產品。然而,與典型超市的同類產品30,000種相比,我們提供超過3百萬種產品。迄今為止,我們還專注於提供較大的包裝規格,考慮到目前提供線上送貨的成本。雖然我們對我們的雜貨業務的規模和增長感到滿意,但我們希望能夠滿足更多客戶的雜貨需求。為此,我們需要更廣泛的實體店面,因為大多數雜貨購物仍然發生在實體店面。Whole Foods Market在40年前開創了天然和有機特色雜貨店的概念。如今,它已成為一個規模龐大且不斷增長的業務,不斷提高健康和可持續食品的標準。在過去一年裡,我們繼續投資這項業務,同時發動一些改變以提高獲利能力。Whole Foods正朝著鼓舞人心的道路前進,但要對實體雜貨市場產生更大影響,我們必須找到一種大規模的雜貨形式,我們認為值得廣泛擴展。Amazon Fresh是我們多年來一直在實驗的品牌,我們正在努力確定和建立適合亞馬遜規模的大型雜貨區隔。雜貨是亞馬遜的一個巨大增長機會。
儘管許多品牌和商家在亞馬遜市場上成功銷售他們的產品,但也有許多品牌和賣家推出了自家網站,直接面向消費者。對於這些商家,他們面臨的挑戰之一是如何將瀏覽量轉化為購買。為了應對這個挑戰,我們創造了「使用Prime購買」。「使用Prime購買」允許第三方品牌和賣家在自家網站上向我們龐大的亞馬遜Prime會員提供產品,並為這些客戶提供快速、免費的Prime運送,和透過其亞馬遜帳戶無縫結帳。「使用Prime購買」為商家提供了幾個額外好處,包括亞馬遜負責產品儲存、選擇、包裝、交貨、付款和退貨等一切事務,全部通過亞馬遜支付和亞馬遜配送完成。最近,「使用Prime購買」已經向所有美國商家開放接軌,到目前為止,在第三方購物網站上,「使用Prime購買」平均使購物者轉換率提高25%。商家對增加銷售並更輕鬆地結帳這些訂單感到興奮,Prime會員喜歡他們可以在更多地方使用Prime福利,而「使用Prime購買」使我們能夠提高全網際網路的購物體驗。
在擴大國際業務、追求對亞馬遜而言仍然新興的大型零售市場細分領域,並利用我們獨特資產幫助商家在自家網站上更有效地銷售,這些都是自然的業務延伸。此外,我們還進行了一些投資,這些投資距離核心業務更遠,但我們在其中看到獨特的機會。2003年,AWS就是一個典型的例子。到了2023年,亞馬遜醫療保健和Kuiper計劃都有潛在相似之處。
我們在醫療保健領域的初步努力始於藥房,對於電子商務來說,這似乎不是一個重大轉變。多年來,亞馬遜客戶一直問我們何時能夠提供線上藥局服務,因為他們對當前供應商越來越不滿。亞馬遜藥局在2020年推出,是一家提供全方位服務的線上藥局,提供透明定價、輕鬆購買處方藥物和為Prime會員節省費用等服務。這業務發展迅速,並持續創新。一個例子是亞馬遜藥局最近推出的RxPass服務,每月只需固定支付5美元費用,Prime會員就可以根據自身需要獲得大量適用的處方藥,涵蓋多種常見疾病,如高血壓、胃食道逆流和焦慮症。然而,客戶繼續強烈表達對亞馬遜提供更好的替代方案,以改善效率低下和不滿意的整體醫療保健體驗的渴望。我們決定從基礎醫療保健開始,因為這是患者旅程中常見的第一站。我們對現有的醫療保健格局進行了廣泛評估和研究,包括亞馬遜早期的實驗,如Amazon Care。在這個過程中,我們認定One Medical以患者為中心的體驗,是我們未來業務出色的基礎;於2022年7月,我們宣布收購One Medical。關於One Medical,有幾個方面深受客戶喜愛。它擁有一個很棒的APP,使患者可以輕鬆透過聊天或視訊會議與醫護人員討論。如果需要實體看診,One Medical在美國各城市設有辦事處,患者可以預約當天或隔天就醫時間。One Medical在每個城市都與專科醫生建立了良好關係,並與當地醫院系統密切合作,以便使患者輕鬆地就診專科醫生,因此One Medical會員在需要時可以快速獲得這些資源。展望未來,我們堅信One Medical和亞馬遜將繼續共同創新,改變顧客對基層醫療體系的認識。
Kuiper則是亞馬遜在高需求的領域,長期為客戶創新的又一例子。我們對Kuiper的願景是建立一個低軌道衛星系統,為目前無法獲得高品質寬頻網路服務的地區提供網路服務。全球有好幾億個家庭和企業,無法得到可靠的上網服務。想像一下,有了可靠的上網連接,人們就可以進行線上教育課程、使用金融服務、創業、購物、享受娛樂,而企業和政府也能提升營運範圍、效率和管理。Kuiper不僅提供可達性,費用也是可負擔的。我們的團隊開發了低成本的天線(即客戶終端設備),降低了上網門檻。我們最近推出了與通過頭頂的衛星通訊的新設備,預計每個標準住宅版設備的成本將低於400美元。這些設備體積小巧,11英寸見方,厚度1英寸,不含安裝支架重量不到5磅,但速度高達每秒400兆位元(Megabits)。它們由亞馬遜設計的基頻晶片供電。我們準備在今年發射兩顆原型衛星,以測試整個點對點通信網路,並計劃在2024年向商業客戶提供測試版服務。迄今為止,客戶對我們分享的Kuiper反應非常積極,我們相信Kuiper代表亞馬遜一個非常大的潛在機遇。它與AWS有幾個相似之處,就是在初始階段需要投入大量資本,但有龐大的潛在消費者、企業和政府客戶群,有可觀的收入和營運利潤潛力,相對較少公司具備技術和創新能力以及投資假設來追求這一領域的商機。
我最後要提到的一個領域,對於讓亞馬遜在未來幾十年在業務每個領域都能進行創新至關重要,而我們在這方面投資非常大,那就是大型語言模型(LLMs)和生成式人工智慧(AI)。機器學習是一項有高度潛力的技術,已有數十年之久,但直到過去5到10年間才開始被企業普遍應用。這種轉變是由多種因素驅動的,包括以往從未有過的,更低價格且更強的計算能力。亞馬遜已經在過去25年中廣泛使用機器學習,應用於個性化電子商務推薦、物流中心揀貨路徑、Prime Air的無人機、Alexa,以及AWS提供的眾多機器學習服務(AWS擁有任何雲提供商中最廣泛的機器學習功能和客戶群)。最近,一種名為生成式人工智能的新型機器學習形式突然出現(編按:即ChatGPT),並承諾顯著加快機器學習的應用。生成式人工智能基於非常大型的語言模型(訓練量可達數千億個參數,且還在不斷增長),遍及廣闊的數據集合,具有極其廣泛和全面的回溯和學習能力。我們開發自家的LLMs已有一段時間了,我們相信它將徹底改變和改進幾乎所有的客戶體驗,並將持續投資在我們所有消費者、賣家、品牌和創作者體驗中。此外,就像我們多年來在AWS中所做的,我們正在普及這項技術,使各種規模的企業都能夠利用生成式人工智慧。AWS提供了Trainium和Inferentia這些性價比最高的機器學習晶片,使得中小型和大型公司都能負擔在生產中訓練和運行他們的LLMs。我們讓企業可以從多種LLM(語言模型)中選擇,並建構具有AWS的安全性、隱私性和其他功能的程式,這些功能是客戶慣用的。此外,我們還提供類似AWS的CodeWhisperer的應用程式,這通過即時生成代碼建議,徹底改變了開發人員的工作效率。我可以就LLM和生成式人工智慧另外寫一封完整的信函,因為我認為它們將具有轉型的影響力,但這部分我會留到未來的信函中再詳細介紹。簡單地說,LLM和生成式人工智能對於客戶、股東和亞馬遜來說都將是一個重大的生意。
因此,總結來說,我對於我們能在這個具有挑戰性的總體經濟時期,以比入行時更強勢的姿態出現,持樂觀態度。其中有幾個原因,我已在上面提到很多。但是,有兩個相對簡單的統計數字,凸顯了我們未來巨大的機遇。雖然我們在2022年的消費業務規模達到了4,340億美元,但全球零售業總市場份額的絕大部分,仍然存在於實體店鋪(約80%)。對全球IT支出也是同樣情況,我們在2022年的AWS收入為800億美元,而全球90%的IT支出仍然是在企業現場,尚未遷移到雲端。隨著這些比例逐漸翻轉—我們已經看到這種情況正在發生——我們相信我們領先的客戶體驗、不斷創新、客戶導向和辛勤工作,將在未來幾年帶來顯著成長。當然,這還不包括我們在亞馬遜正在追求的其他業務和體驗,這些都還處於初創階段。
我堅信我們最美好的日子尚在前方,我期待著與亞馬遜的團隊合作,共同實現這一目標。
此致,
Andy Jassy
總裁兼CEO
亞馬遜公司
附註:正如我們一直以來所做的,我們將附上我們最初於1997年發表的股東信函。其中內容與當今依然一樣真實。
致各位股東:
亞馬遜公司在1997年取得了許多里程碑:到年底時,我們已經為超過150萬名客戶提供服務,實現了838%的收入增長,達到1.478億美元,並在激烈的競爭環境中保持了市場領先地位。
但是,對於互聯網和亞馬遜公司來說,這才是第一天。如今,網上商業為客戶節省了金錢和寶貴的時間。明天,通過個性化,網上商業將加速發現過程。亞馬遜公司利用互聯網為客戶創造真實的價值,並希望在已建立和龐大的市場中創造一個持久的特許經營權。
作為大型參與者動員資源追求線上機會的窗口,以及對於新接觸網購的客戶對建立新關係持開放態度,我們正處於一個機遇之中。競爭環境仍在快速演變。許多大型參與者已經推出可信的網上產品,並投入大量精力和資源來建立知名度、流量和銷售額。我們的目標是迅速鞏固和擴展我們目前的地位,同時開始在其他領域追求網上商業機會。我們在所定目標的大型市場中看到了巨大的機會。這種策略並非沒有風險:它需要嚴肅的投資和對已建立的特許經營領導者進行精準執行。
長遠視野至上 我們相信,我們的成功基本衡量標準將是我們長期創造的股東價值。這個價值將直接取決於我們擴展和鞏固目前市場領先地位的能力。我們的市場領先地位越強大,我們的經濟模型就越強大。市場領先地位可以直接轉化為更高的收入、更高的盈利能力、更快的資本周轉速度,以及相應的更高投資回報率。 我們的決策一直反映出這種關注。我們首先以最能反映我們市場領先地位的指標來衡量自己:客戶和收入增長、客戶持續回購的程度,以及我們品牌的力量。我們一直在大力投資,並將繼續投資,以擴大和利用我們的客戶群、品牌和基礎設施,以建立一個持久的特許經營權。
因為我們強調長期發展,所以在做出決策和權衡時,我們可能與其他公司有所不同。因此,我們希望與您,我們的股東,分享我們的基本管理和決策方法,以便您確認它與您的投資理念一致:
我們將繼續不懈地關注我們的客戶。
我們將在考慮長期市場領先地位的前提下做出投資決策,而不是考慮短期利潤或華爾街的短期反應。
我們將繼續以分析的方式衡量我們的計劃和投資的效果,淘汰那些回報不符合要求的項目,並加大對效果最好的項目的投資。
我們將繼續從成功和失敗中學習。 當我們看到足夠可能獲得市場領先優勢的時候,我們將做出大膽的投資決策,而不是膽怯的決策。這些投資中有些會取得成功,有些不會,但無論哪種情況,我們都會從中學到寶貴的經驗教訓。
當需要在優化我們的GAAP會計外觀和最大化未來現金流量的現值之間做出選擇時,我們會選擇現金流量。
我們將在做出大膽選擇時與您分享我們的戰略思考過程(在競爭壓力允許的範圍內),以便您自行評估我們是否做出了合理的長期領導力投資。
我們將努力明智地支出和維持我們的精簡文化。我們明白在一個虧損企業中,持續強化節約成本的文化意義重大。
我們將平衡對增長的關注與對長期盈利能力和資本管理的重視。在這個階段,我們選擇優先考慮增長,因為我們相信規模對實現我們的商業模式潛力至關重要。
我們將繼續專注於招聘和留住多才多藝的員工,並繼續將他們的薪酬以股票期權為主,而不是現金。我們知道我們的成功在很大程度上取決於能否吸引和留住一支積極進取的員工隊伍,每個人都必須像業主一樣思考和行動。
我們不敢妄稱以上是“正確”的投資理念,但這是我們的理念,如果我們不清楚地表明我們所採取和將繼續採取的方法,那就是我們的過失。
在這個基礎上,我們想轉向對我們的業務重點、我們在1997年的進展以及對未來的展望進行回顧。
迷戀於顧客
從一開始,我們的重點就是為顧客提供具有吸引力的價值。我們意識到網絡是世界廣域等待的時代。因此,我們著手為顧客提供他們在其他地方無法得到的東西,並開始以書籍為顧客提供服務。我們提供了比實體店面更多的選擇(我們的店面現在能佔據6個足球場),並以一個便於搜索、瀏覽的有用格式呈現,全年365天,每天24小時開放。我們堅持不懈地專注於改善購物體驗,在1997年大幅增強了我們的商店功能。我們現在提供顧客禮品券、1-Click購物和更多的評論、內容、瀏覽選項和推薦功能。我們大幅降低了價格,進一步提高了顧客的價值。口碑仍然是我們最強大的顧客獲取工具,我們感謝顧客對我們的信任。重複購買和口碑相結合,使得Amazon.com成為網上書籍銷售的市場領導者。
從許多指標來看,Amazon.com在1997年取得了長足的進展:
銷售額從1996年的1,570萬美元增長到1億4780萬美元,增幅達838%。 累計顧客數從18萬增長到151萬,增幅達738%。 重複顧客的訂單比例從1996年第四季度的46%增長到1997年同期的58%以上。 在觀眾覆蓋度方面,根據Media Metrix的數據,我們的網站從排名第90位進入前20名之內。 我們與許多重要的戰略合作夥伴建立了長期關係,包括America Online、Yahoo!、Excite、Netscape、GeoCities、AltaVista、@Home和Prodigy。
基礎設施
在1997年,我們努力擴展業務基礎設施,以支持大幅增加的流量、銷售和服務水平:
Amazon.com的員工人數從158人增長到614人,我們極大地加強了管理團隊。 配送中心的容量從5萬平方英尺增長到28.5萬平方英尺,其中西雅圖設施擴建了70%,並於11月在德拉瓦州開設了第二個配送中心。 庫存量在年底超過20萬種書籍,使我們能夠提供更好的供應給客戶。 我們在年底的現金和投資餘額為1.25億美元,這要歸功於我們在1997年5月的首次公開募股和7,500萬美元的貸款,為我們提供了相當大的戰略靈活性。
我們的員工
過去一年的成功是一個才華橫溢、聰明勤奮的團隊的成果,我非常自豪能成為這個團隊的一員。在招聘方面,我們一直將標準設定得很高,這一點一直是Amazon.com成功的最重要因素,並將繼續如此。
在這裡工作並不容易(當我面試人時,我告訴他們,“你可以長時間工作,努力工作,或者聰明工作,但在Amazon.com,你不能選擇其中的兩個”),但我們致力於建設一些重要的事情,這些事情對我們的客戶至關重要,這是我們可以告訴我們的孫子孫女的事情。這些事情並不容易。我們非常幸運擁有這樣一群奉獻精神的員工,他們的犧牲和熱情建立了Amazon.com。
1998年的目標
我們仍然處於通過互聯網商業和商品銷售為客戶帶來新價值的早期階段。我們的目標仍然是持續鞏固和擴大我們的品牌和客戶基礎。這需要在系統和基礎設施上進行持續投資,以支持出色的客戶便利性、選擇性和服務性的同時實現業務增長。我們計劃將音樂納入我們的產品供應範圍,並且隨著時間的推移,我們認為其他產品可能也是明智的投資。我們還相信,有很大的機會更好地為海外客戶提供服務,例如縮短交貨時間和更好地量身定制客戶體驗。確保的是,對我們來說,挑戰的一大部分不在於尋找擴展業務的新途徑,而在於優先考慮我們的投資。
我們現在對於網上商務的了解遠比亞馬遜成立時要豐富得多,但我們仍然有很多需要學習的地方。雖然我們對未來充滿樂觀,但我們必須保持警覺,保持著緊迫感。實現亞馬遜的長期願景將面臨許多挑戰和障礙:具有侵略性、實力強大、資金充裕的競爭;相當大的增長挑戰和執行風險;產品和地理擴張的風險;以及為滿足不斷擴大的市場機遇而需要進行的大型持續投資。然而,正如我們長期以來所說的,在線圖書銷售和網上商務一般應該會成為一個非常巨大的市場,許多公司可能會獲得顯著的好處。我們對我們所做的事情感到自豪,對我們想要做的事情更加興奮。
1997年確實是一個令人難以置信的一年。我們在亞馬遜非常感謝客戶的業務和信任,感謝彼此的辛勤工作,感謝股東的支持和鼓勵。
Jeffrey P. Bezos
創辦人兼CEO
Amazon
編按:原文來自亞馬遜CEO 2023年給股東的信
2023 CEO letter to shareholders full text
Dear shareholders:
As I sit down to write my second annual shareholder letter as CEO, I find myself optimistic and energized by what lies ahead for Amazon. Despite 2022 being one of the harder macroeconomic years in recent memory, and with some of our own operating challenges to boot, we still found a way to grow demand (on top of the unprecedented growth we experienced in the first half of the pandemic). We innovated in our largest businesses to meaningfully improve customer experience short and long term. And, we made important adjustments in our investment decisions and the way in which we’ll invent moving forward, while still preserving the long-term investments that we believe can change the future of Amazon for customers, shareholders, and employees.
While there were an unusual number of simultaneous challenges this past year, the reality is that if you operate in large, dynamic, global market segments with many capable and well-funded competitors (the conditions in which Amazon operates all of its businesses), conditions rarely stay stagnant for long.
In the 25 years I’ve been at Amazon, there has been constant change, much of which we’ve initiated ourselves. When I joined Amazon in 1997, we had booked $15M in revenue in 1996, were a books-only retailer, did not have a third-party marketplace, and only shipped to addresses in the US. Today, Amazon sells nearly every physical and digital retail item you can imagine, with a vibrant third-party seller ecosystem that accounts for 60% of our unit sales, and reaches customers in virtually every country around the world. Similarly, building a business around a set of technology infrastructure services in the cloud was not obvious in 2003 when we started pursuing AWS, and still wasn’t when we launched our first services in 2006. Having virtually every book at your fingertips in 60 seconds, and then being able to store and retrieve them on a lightweight digital reader was not “a thing” yet when we launched Kindle in 2007, nor was a voice-driven personal assistant like Alexa (launched in 2014) that you could use to access entertainment, control your smart home, shop, and retrieve all sorts of information.
There have also been times when macroeconomic conditions or operating inefficiencies have presented us with new challenges. For instance, in the 2001 dot-com crash, we had to secure letters of credit to buy inventory for the holidays, streamline costs to deliver better profitability for the business, yet still prioritized the long-term customer experience and business we were trying to build (if you remember, we actually lowered prices in most of our categories during that tenuous 2001 period). You saw this sort of balancing again in 2008-2009 as we endured the recession provoked by the mortgage-backed securities financial crisis. We took several actions to manage the cost structure and efficiency of our Stores business, but we also balanced this streamlining with investment in customer experiences that we believed could be substantial future businesses with strong returns for shareholders. In 2008, AWS was still a fairly small, fledgling business. We knew we were on to something, but it still required substantial capital investment. There were voices inside and outside of the company questioning why Amazon (known mostly as an online retailer then) would be investing so much in cloud computing. But, we knew we were inventing something special that could create a lot of value for customers and Amazon in the future. We had a head start on potential competitors; and if anything, we wanted to accelerate our pace of innovation. We made the long-term decision to continue investing in AWS. Fifteen years later, AWS is now an $85B annual revenue run rate business, with strong profitability, that has transformed how customers from start-ups to multinational companies to public sector organizations manage their technology infrastructure. Amazon would be a different company if we’d slowed investment in AWS during that 2008-2009 period.
Change is always around the corner. Sometimes, you proactively invite it in, and sometimes it just comes a-knocking. But, when you see it’s coming, you have to embrace it. And, the companies that do this well over a long period of time usually succeed. I’m optimistic about our future prospects because I like the way our team is responding to the changes we see in front of us.
Over the last several months, we took a deep look across the company, business by business, invention by invention, and asked ourselves whether we had conviction about each initiative’s long-term potential to drive enough revenue, operating income, free cash flow, and return on invested capital. In some cases, it led to us shuttering certain businesses. For instance, we stopped pursuing physical store concepts like our Bookstores and 4 Star stores, closed our Amazon Fabric and Amazon Care efforts, and moved on from some newer devices where we didn’t see a path to meaningful returns. In other cases, we looked at some programs that weren’t producing the returns we’d hoped (e.g. free shipping for all online grocery orders over $35) and amended them. We also reprioritized where to spend our resources, which ultimately led to the hard decision to eliminate 27,000 corporate roles. There are a number of other changes that we’ve made over the last several months to streamline our overall costs, and like most leadership teams, we’ll continue to evaluate what we’re seeing in our business and proceed adaptively.
We also looked hard at how we were working together as a team and asked our corporate employees to come back to the office at least three days a week, beginning in May. During the pandemic, our employees rallied to get work done from home and did everything possible to keep up with the unexpected circumstances that presented themselves. It was impressive and I’m proud of the way our collective team came together to overcome unprecedented challenges for our customers, communities, and business. But, we don’t think it’s the best long-term approach. We’ve become convinced that collaborating and inventing is easier and more effective when we’re working together and learning from one another in person. The energy and riffing on one another’s ideas happen more freely, and many of the best Amazon inventions have had their breakthrough moments from people staying behind after a meeting and working through ideas on a whiteboard, or continuing the conversation on the walk back from a meeting, or just popping by a teammate’s office later that day with another thought. Invention is often messy. It wanders and meanders and marinates. Serendipitous interactions help it, and there are more of those in-person than virtually. It’s also significantly easier to learn, model, practice, and strengthen our culture when we’re in the office together most of the time and surrounded by our colleagues. Innovation and our unique culture have been incredibly important in our first 29 years as a company, and I expect it will be comparably so in the next 29.
A critical challenge we’ve continued to tackle is the rising cost to serve in our Stores fulfillment network (i.e. the cost to get a product from Amazon to a customer)—and we’ve made several changes that we believe will meaningfully improve our fulfillment costs and speed of delivery.
During the early part of the pandemic, with many physical stores shut down, our consumer business grew at an extraordinary clip, with annual revenue increasing from $245B in 2019 to $434B in 2022. This meant that we had to double the fulfillment center footprint that we’d built over the prior 25 years and substantially accelerate building a last-mile transportation network that’s now the size of UPS (along with a new sortation center network to assist with efficiency and speed when items needed to traverse long distances)—all in the span of about two years. This was no easy feat, and hundreds of thousands of Amazonians worked very hard to make this happen. However, not surprisingly, with that rate and scale of change, there was a lot of optimization needed to yield the intended productivity. Over the last several months, we’ve scrutinized every process path in our fulfillment centers and transportation network and redesigned scores of processes and mechanisms, resulting in steady productivity gains and cost reductions over the last few quarters. There’s more work to do, but we’re pleased with our trajectory and the meaningful upside in front of us.
We also took this occasion to make larger structural changes that set us up better to deliver lower costs and faster speed for many years to come. A good example was reevaluating how our US fulfillment network was organized. Until recently, Amazon operated one national US fulfillment network that distributed inventory from fulfillment centers spread across the entire country. If a local fulfillment center didn’t have the product a customer ordered, we’d end up shipping it from other parts of the country, costing us more and increasing delivery times. This challenge became more pronounced as our fulfillment network expanded to hundreds of additional nodes over the last few years, distributing inventory across more locations and increasing the complexity of connecting the fulfillment center and delivery station nodes efficiently. Last year, we started rearchitecting our inventory placement strategy and leveraging our larger fulfillment center footprint to move from a national fulfillment network to a regionalized network model. We made significant internal changes (e.g. placement and logistics software, processes, physical operations) to create eight interconnected regions in smaller geographic areas. Each of these regions has broad, relevant selection to operate in a largely self-sufficient way, while still being able to ship nationally when necessary. Some of the most meaningful and hard work came from optimizing the connections between this large amount of infrastructure. We also continue to improve our advanced machine learning algorithms to better predict what customers in various parts of the country will need so that we have the right inventory in the right regions at the right time. We’ve recently completed this regional roll out and like the early results. Shorter travel distances mean lower cost to serve, less impact on the environment, and customers getting their orders faster. On the latter, we’re excited about seeing more next day and same-day deliveries, and we’re on track to have our fastest Prime delivery speeds ever in 2023. Overall, we remain confident about our plans to lower costs, reduce delivery times, and build a meaningfully larger retail business with healthy operating margins.
AWS has an $85B annualized revenue run rate, is still early in its adoption curve, but at a juncture where it’s critical to stay focused on what matters most to customers over the long-haul. Despite growing 29% year-over-year (“YoY”) in 2022 on a $62B revenue base, AWS faces short-term headwinds right now as companies are being more cautious in spending given the challenging, current macroeconomic conditions. While some companies might obsess over how they could extract as much money from customers as possible in these tight times, it’s neither what customers want nor best for customers in the long term, so we’re taking a different tack. One of the many advantages of AWS and cloud computing is that when your business grows, you can seamlessly scale up; and conversely, if your business contracts, you can choose to give us back that capacity and cease paying for it. This elasticity is unique to the cloud, and doesn’t exist when you’ve already made expensive capital investments in your own on-premises datacenters, servers, and networking gear. In AWS, like all our businesses, we’re not trying to optimize for any one quarter or year. We’re trying to build customer relationships (and a business) that outlast all of us; and as a result, our AWS sales and support teams are spending much of their time helping customers optimize their AWS spend so they can better weather this uncertain economy. Many of these AWS customers tell us that they’re not cost-cutting as much as cost-optimizing so they can take their resources and apply them to emerging and inventive new customer experiences they’re planning. Customers have appreciated this customer-focused, long-term approach, and we think it’ll bode well for both customers and AWS.
While these short-term headwinds soften our growth rate, we like a lot of the fundamentals that we’re seeing in AWS. Our new customer pipeline is robust, as are our active migrations. Many companies use discontinuous periods like this to step back and determine what they strategically want to change, and we find an increasing number of enterprises opting out of managing their own infrastructure, and preferring to move to AWS to enjoy the agility, innovation, cost-efficiency, and security benefits. And most importantly for customers, AWS continues to deliver new capabilities rapidly (over 3,300 new features and services launched in 2022), and invest in long-term inventions that change what’s possible.
Chip development is a good example. In last year’s letter, I mentioned the investment we were making in our general-purpose CPU processors named Graviton. Graviton2-based compute instances deliver up to 40% better price-performance than the comparable latest generation x86-based instances; and in 2022, we delivered our Graviton3 chips, providing 25% better performance than the Graviton2 processors. Further, as machine learning adoption has continued to accelerate, customers have yearned for lower-cost GPUs (the chips most commonly used for machine learning). AWS started investing years ago in these specialized chips for machine learning training and inference (inferences are the predictions or answers that a machine learning model provides). We delivered our first training chip in 2022 (“Trainium”); and for the most common machine learning models, Trainium-based instances are up to 140% faster than GPU-based instances at up to 70% lower cost. Most companies are still in the training stage, but as they develop models that graduate to large-scale production, they’ll find that most of the cost is in inference because models are trained periodically whereas inferences are happening all the time as their associated application is being exercised. We launched our first inference chips (“Inferentia”) in 2019, and they have saved companies like Amazon over a hundred million dollars in capital expense already. Our Inferentia2 chip, which just launched, offers up to four times higher throughput and ten times lower latency than our first Inferentia processor. With the enormous upcoming growth in machine learning, customers will be able to get a lot more done with AWS’s training and inference chips at a significantly lower cost. We’re not close to being done innovating here, and this long-term investment should prove fruitful for both customers and AWS. AWS is still in the early stages of its evolution, and has a chance for unusual growth in the next decade.
Similarly high potential, Amazon’s Advertising business is uniquely effective for brands, which is part of why it continues to grow at a brisk clip. Akin to physical retailers’ advertising businesses selling shelf space, end-caps, and placement in their circulars, our sponsored products and brands offerings have been an integral part of the Amazon shopping experience for more than a decade. However, unlike physical retailers, Amazon can tailor these sponsored products to be relevant to what customers are searching for given what we know about shopping behaviors and our very deep investment in machine learning algorithms. This leads to advertising that’s more useful for customers; and as a result, performs better for brands. This is part of why our Advertising revenue has continued to grow rapidly (23% YoY in Q4 2022, 25% YoY overall for 2022 on a $31B revenue base), even as most large advertising-focused businesses’ growth have slowed over the last several quarters.
We strive to be the best place for advertisers to build their brands. We have near and long-term opportunities that will help us achieve that mission. We’re continuing to make large investments in machine learning to keep honing our advertising selection algorithms. For the past couple of years, we’ve invested in building comprehensive, flexible, and durable planning and measurement solutions, giving marketers greater insight into advertising effectiveness. An example is Amazon Marketing Cloud (“AMC”). AMC is a “clean room” (i.e. secure digital environment) in which advertisers can run custom audience and campaign analytics across a range of first and third-party inputs, in a privacy-safe manner, to generate advertising and business insights to inform their broader marketing and sales strategies. The Advertising and AWS teams have collaborated to enable companies to store their data in AWS, operate securely in AMC with Amazon and other third-party data sources, perform analytics in AWS, and have the option to activate advertising on Amazon or third-party publishers through the Amazon Demand-Side Platform. Customers really like this concerted capability. We also see future opportunity to thoughtfully integrate advertising into our video, live sports, audio, and grocery products. We’ll continue to work hard to help brands uniquely engage with the right audience, and grow this part of our business.
While it’s tempting in turbulent times only to focus on your existing large businesses, to build a sustainable, long-lasting, growing company that helps customers across a large number of dimensions, you can’t stop inventing and working on long-term customer experiences that can meaningfully impact customers and your company.
When we look at new investment opportunities, we ask ourselves a few questions:
If we were successful, could it be big and have a reasonable return on invested capital?
Is the opportunity being well-served today?
Do we have a differentiated approach?
And, do we have competence in that area? And if not, can we acquire it quickly?
If we like the answers to those questions, then we’ll invest. This process has led to some expansions that seem straightforward, and others that some folks might not have initially guessed.
The earliest example is when we chose to expand from just selling Books, to adding categories like Music, Video, Electronics, and Toys. Back then (1998-1999), it wasn’t universally applauded, but in retrospect, it seems fairly obvious.
The same could be said for our international Stores expansion. In 2022, our international consumer segment drove $118B of revenue. In our larger, established international consumer businesses, we’re big enough to be impacted by the slowing macroeconomic conditions; however, the growth in 2019-2021 on a large base was remarkable—30% compound annual growth rate (“CAGR”) in the UK, 26% in Germany, and 21% in Japan (excluding the impact of FX). Over the past several years, we’ve invested in new international geographies, including India, Brazil, Mexico, Australia, various European countries, the Middle East, and parts of Africa. These new countries take a certain amount of fixed investment to get started and to scale, but we like the trajectory they’re on, and their growth patterns resemble what we’ve seen in North America and our established international geographies. Emerging countries sometimes lack some of the infrastructure and services that our business relies on (e.g. payment methods, transportation services, and internet/telecom infrastructure). To solve these challenges, we continue to work with various partners to deliver solutions for customers. Ultimately, we believe that this investment in serving a broader geographical footprint will allow us to help more customers across the world, as well as build a larger free cash flow-generating consumer business.
Beyond geographic expansion, we’ve been working to expand our customer offerings across some large, unique product retail market segments. Grocery is an $800B market segment in the US alone, with the average household shopping three to four times per week. Amazon has built a somewhat unusual, but significant grocery business over nearly 20 years. Similar to how other mass merchants entered the grocery space in the 1980s, we began by adding products typically found in supermarket aisles that don’t require temperature control such as paper products, canned and boxed food, candy and snacks, pet care, health and personal care, and beauty. However, we offer more than three million items compared to a typical supermarket’s 30K for the same categories. To date, we’ve also focused on larger pack sizes, given the current cost to serve online delivery. While we’re pleased with the size and growth of our grocery business, we aspire to serve more of our customers’ grocery needs than we do today. To do so, we need a broader physical store footprint given that most of the grocery shopping still happens in physical venues. Whole Foods Market pioneered the natural and organic specialty grocery store concept 40 years ago. Today, it’s a large and growing business that continues to raise the bar for healthy and sustainable food. Over the past year, we’ve continued to invest in the business while also making changes to drive better profitability. Whole Foods is on an encouraging path, but to have a larger impact on physical grocery, we must find a mass grocery format that we believe is worth expanding broadly. Amazon Fresh is the brand we’ve been experimenting with for a few years, and we’re working hard to identify and build the right mass grocery format for Amazon scale. Grocery is a big growth opportunity for Amazon.
Amazon Business is another example of an investment where our ecommerce and logistics capabilities position us well to pursue this large market segment. Amazon Business allows businesses, municipalities, and organizations to procure products like office supplies and other bulk items easily and at great savings. While some areas of the economy have struggled over the past few years, Amazon Business has thrived. Why? Because the team has translated what it means to deliver selection, value, and convenience into a business procurement setting, constantly listening to and learning from customers, and innovating on their behalf. Some people have never heard of Amazon Business, but, our business customers love it. Amazon Business launched in 2015 and today drives roughly $35B in annualized gross sales. More than six million active customers, including 96 of the global Fortune 100 companies, are enjoying Amazon Business’ one-stop shopping, real-time analytics, and broad selection on hundreds of millions of business supplies. We believe that we’ve only scratched the surface of what’s possible to date, and plan to keep building the features our business customers tell us they need and want.
While many brands and merchants successfully sell their products on Amazon’s marketplace, there are also a large number of brands and sellers who have launched their own direct-to-consumer websites. One of the challenges for these merchants is driving conversion from views to purchases. We invented Buy with Prime to help with this challenge. Buy with Prime allows third-party brands and sellers to offer their products on their own websites to our large Amazon Prime membership, and offer those customers fast, free Prime shipping and seamless checkout with their Amazon account. Buy with Prime provides merchants several additional benefits, including Amazon handling the product storage, picking, packing, delivery, payment, and any returns, all through Amazon Pay and Fulfillment by Amazon. Buy with Prime has recently been made available to all US merchants; and so far, Buy with Prime has increased shopper conversion on third-party shopping sites by 25% on average. Merchants are excited about converting more sales and fulfilling these shipments more easily, Prime members love that they can use their Prime benefits on more destinations, and Buy with Prime allows us to improve the shopping experience across more of the web.
Expanding internationally, pursuing large retail market segments that are still nascent for Amazon, and using our unique assets to help merchants sell more effectively on their own websites are somewhat natural extensions for us. There are also a few investments we’re making that are further from our core businesses, but where we see unique opportunity. In 2003, AWS would have been a classic example. In 2023, Amazon Healthcare and Kuiper are potential analogues.
Our initial efforts in Healthcare began with pharmacy, which felt less like a major departure from ecommerce. For years, Amazon customers had asked us when we’d offer them an online pharmacy as their frustrations mounted with current providers. Launched in 2020, Amazon Pharmacy is a full-service, online pharmacy that offers transparent pricing, easy refills, and savings for Prime members. The business is growing quickly, and continues to innovate. An example is Amazon Pharmacy’s recent launch of RxPass, which for a $5 per month flat fee, enables Prime members to get as many of the eligible prescription medications as they need for dozens of common conditions, like high blood pressure, acid reflux, and anxiety. However, our customers have continued to express a strong desire for Amazon to provide a better alternative to the inefficient and unsatisfying broader healthcare experience. We decided to start with primary care as it’s a prevalent first stop in the patient journey. We evaluated and studied the existing landscape extensively, including some early Amazon experiments like Amazon Care. During this process, we identified One Medical’s patient-focused experience as an excellent foundation upon which to build our future business; and in July 2022, we announced our acquisition of One Medical. There are several elements that customers love about One Medical. It has a fantastic digital app that makes it easy for patients to discuss issues with a medical practitioner via chat or video conference. If a physical visit is required, One Medical has offices in cities across the US where patients can book same or next day appointments. One Medical has relationships with specialty physicians in each of its cities and works closely with local hospital systems to make seeing specialists easy, so One Medical members can quickly access these resources when needed. Going forward, we strongly believe that One Medical and Amazon will continue to innovate together to change what primary care will look like for customers.
Kuiper is another example of Amazon innovating for customers over the long term in an area where there’s high customer need. Our vision for Kuiper is to create a low-Earth orbit satellite system to deliver high-quality broadband internet service to places around the world that don’t currently have it. There are hundreds of millions of households and businesses who don’t have reliable access to the internet. Imagine what they’ll be able to do with reliable connectivity, from people taking online education courses, using financial services, starting their own businesses, doing their shopping, enjoying entertainment, to businesses and governments improving their coverage, efficiency, and operations. Kuiper will deliver not only accessibility, but affordability. Our teams have developed low-cost antennas (i.e. customer terminals) that will lower the barriers to access. We recently unveiled the new terminals that will communicate with the satellites passing overhead, and we expect to be able to produce our standard residential version for less than $400 each. They’re small: 11 inches square, 1 inch thick, and weigh less than 5 pounds without their mounting bracket, but they deliver speeds up to 400 megabits per second. And they’re powered by Amazon-designed baseband chips. We’re preparing to launch two prototype satellites to test the entire end-to-end communications network this year, and plan to be in beta with commercial customers in 2024. The customer reaction to what we’ve shared thus far about Kuiper has been very positive, and we believe Kuiper represents a very large potential opportunity for Amazon. It also shares several similarities to AWS in that it’s capital intensive at the start, but has a large prospective consumer, enterprise, and government customer base, significant revenue and operating profit potential, and relatively few companies with the technical and inventive aptitude, as well as the investment hypothesis to go after it.
One final investment area that I’ll mention, that’s core to setting Amazon up to invent in every area of our business for many decades to come, and where we’re investing heavily is Large Language Models (“LLMs”) and Generative AI. Machine learning has been a technology with high promise for several decades, but it’s only been the last five to ten years that it’s started to be used more pervasively by companies. This shift was driven by several factors, including access to higher volumes of compute capacity at lower prices than was ever available. Amazon has been using machine learning extensively for 25 years, employing it in everything from personalized ecommerce recommendations, to fulfillment center pick paths, to drones for Prime Air, to Alexa, to the many machine learning services AWS offers (where AWS has the broadest machine learning functionality and customer base of any cloud provider). More recently, a newer form of machine learning, called Generative AI, has burst onto the scene and promises to significantly accelerate machine learning adoption. Generative AI is based on very Large Language Models (trained on up to hundreds of billions of parameters, and growing), across expansive datasets, and has radically general and broad recall and learning capabilities. We have been working on our own LLMs for a while now, believe it will transform and improve virtually every customer experience, and will continue to invest substantially in these models across all of our consumer, seller, brand, and creator experiences. Additionally, as we’ve done for years in AWS, we’re democratizing this technology so companies of all sizes can leverage Generative AI. AWS is offering the most price-performant machine learning chips in Trainium and Inferentia so small and large companies can afford to train and run their LLMs in production. We enable companies to choose from various LLMs and build applications with all of the AWS security, privacy and other features that customers are accustomed to using. And, we’re delivering applications like AWS’s CodeWhisperer, which revolutionizes developer productivity by generating code suggestions in real time. I could write an entire letter on LLMs and Generative AI as I think they will be that transformative, but I’ll leave that for a future letter. Let’s just say that LLMs and Generative AI are going to be a big deal for customers, our shareholders, and Amazon.
So, in closing, I’m optimistic that we’ll emerge from this challenging macroeconomic time in a stronger position than when we entered it. There are several reasons for it and I’ve mentioned many of them above. But, there are two relatively simple statistics that underline our immense future opportunity. While we have a consumer business that’s $434B in 2022, the vast majority of total market segment share in global retail still resides in physical stores (roughly 80%). And, it’s a similar story for Global IT spending, where we have AWS revenue of $80B in 2022, with about 90% of Global IT spending still on-premises and yet to migrate to the cloud. As these equations steadily flip—as we’re already seeing happen—we believe our leading customer experiences, relentless invention, customer focus, and hard work will result in significant growth in the coming years. And, of course, this doesn’t include the other businesses and experiences we’re pursuing at Amazon, all of which are still in their early days.
I strongly believe that our best days are in front of us, and I look forward to working with my teammates at Amazon to make it so.
Sincerely,
Andy Jassy
President and Chief Executive Officer
Amazon.com, Inc.
P.S. As we have always done, our original 1997 Shareholder Letter follows. What’s written there is as true today as it was in 1997.
To our shareholders:
Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry.
But this is Day 1 for the Internet and, if we execute well, for Amazon.com. Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.
We have a window of opportunity as larger players marshal the resources to pursue the online opportunity and as customers, new to purchasing online, are receptive to forming new relationships. The competitive landscape has continued to evolve at a fast pace. Many large players have moved online with credible offerings and have devoted substantial energy and resources to building awareness, traffic, and sales. Our goal is to move quickly to solidify and extend our current position while we begin to pursue the online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investment and crisp execution against established franchise leaders.
It’s All About the Long Term
We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.
Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.
Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:
We will continue to focus relentlessly on our customers.
We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.
We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.
We aren’t so bold as to claim that the above is the “right” investment philosophy, but it’s ours, and we would be remiss if we weren’t clear in the approach we have taken and will continue to take.
With this foundation, we would like to turn to a review of our business focus, our progress in 1997, and our outlook for the future.
Obsess Over Customers
From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy- to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-Click shopping℠, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat purchases and word of mouth have combined to make Amazon.com the market leader in online bookselling.
By many measures, Amazon.com came a long way in 1997:
Sales grew from $15.7 million in 1996 to $147.8 million – an 838% increase.
Cumulative customer accounts grew from 180,000 to 1,510,000 – a 738% increase.
The percentage of orders from repeat customers grew from over 46% in the fourth quarter of 1996 to over 58% in the same period in 1997.
In terms of audience reach, per Media Metrix, our Web site went from a rank of 90th to within the top 20.
We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy.
Infrastructure
During 1997, we worked hard to expand our business infrastructure to support these greatly increased traffic, sales, and service levels:
Amazon.com’s employee base grew from 158 to 614, and we significantly strengthened our management team.
Distribution center capacity grew from 50,000 to 285,000 square feet, including a 70% expansion of our Seattle facilities and the launch of our second distribution center in Delaware in November.
Inventories rose to over 200,000 titles at year-end, enabling us to improve availability for our customers.
Our cash and investment balances at year-end were $125 million, thanks to our initial public offering in May 1997 and our $75 million loan, affording us substantial strategic flexibility.
Our Employees
The past year’s success is the product of a talented, smart, hard-working group, and I take great pride in being a part of this team. Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of Amazon.com’s success.
It’s not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com.
Goals for 1998
We are still in the early stages of learning how to bring new value to our customers through Internet commerce and merchandising. Our goal remains to continue to solidify and extend our brand and customer base. This requires sustained investment in systems and infrastructure to support outstanding customer convenience, selection, and service while we grow. We are planning to add music to our product offering, and over time we believe that other products may be prudent investments. We also believe there are significant opportunities to better serve our customers overseas, such as reducing delivery times and better tailoring the customer experience. To be certain, a big part of the challenge for us will lie not in finding new ways to expand our business, but in prioritizing our investments.
We now know vastly more about online commerce than when Amazon.com was founded, but we still have so much to learn. Though we are optimistic, we must remain vigilant and maintain a sense of urgency. The challenges and hurdles we will face to make our long-term vision for Amazon.com a reality are several: aggressive, capable, well-funded competition; considerable growth challenges and execution risk; the risks of product and geographic expansion; and the need for large continuing investments to meet an expanding market opportunity. However, as we’ve long said, online bookselling, and online commerce in general, should prove to be a very large market, and it’s likely that a number of companies will see significant benefit. We feel good about what we’ve done, and even more excited about what we want to do.
1997 was indeed an incredible year. We at Amazon.com are grateful to our customers for their business and trust, to each other for our hard work, and to our shareholders for their support and encouragement.
Jeffrey P. Bezos
Founder and Chief Executive Officer
Amazon.com, Inc.