Bezos snubs eBay,Walmart in shareholders'letter
E-commerce giant eBay's shares slipped by 5 per cent after Amazon CEO Jeff Bezos took a dig at the e-commerce rival, saying Amazon has completely outperformed it.
In an annual letter to his shareholders on Thursday, Bezos compared the growth in merchandise sales of third-party sellers on Amazon since 1999 with the growth of third-party sales on eBay in the same period.
"Third-party sales (on Amazon) have grown from $0.1 billion to $160 billion - a compound annual growth rate of 52 per cent. To provide an external benchmark, eBay's gross merchandise sales in that period have grown at a compound rate of 20 per cent, from $2.8 billion to $95 billion," Bezos wrote.
eBay CEO Devin Wenig responded on Twitter.
"While I appreciate the ink dedicated to from the CEO of the company not focused on competition, think I"ll dedicate my letter to customers, purpose and strategy. We don't compete with our sellers. We don't bundle endless services to create barriers to competition," Wenig tweeted as eBay's stock fell by 5 per cent on Thursday.
Bezos said the company has raised its minimum wage to $15-an-hour which has benefited more than 250,000 Amazon employees, as well as over 100,000 seasonal employees.
"Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage. Do it! Better yet, go to $16 and throw the gauntlet back at us," he commented.
The dig was taken on Walmart.
Dan Bartlett, Walmart's Executive Vice President of Corporate Affairs, responded in a tweet: "Hey retail competitors out there (you know who you are) how about paying your taxes?"
According to Bezos, independent third-party sellers - mostly small- and medium-sized businesses - have grown from 3 per cent of the total to 58 per cent since 1999.
"To put it bluntly: Third-party sellers are kicking our first party butt. Badly," he wrote.
Amazon's first-party business has grown dramatically over that period, from $1.6 billion in 1999 to $117 billion this past year.
"The compound annual growth rate for our first-party business in that time period is 25 per cent," Bezos said, adding that Amazon helped independent sellers compete against its first-party business by investing in and offering them the very best-selling tools.
Bezos was also bullish on the Amazon Echo smart Home speakers.
"Since the first-generation Echo, customers have purchased more than 100 million Alexa-enabled devices," he said.
There are now more than 150 different products available with Alexa built-in, from headphones and PCs to cars and smart home devices.
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