Amazon, the world's largest online retailer and a dominant player in the global e-commerce market, was founded by Jeff Bezos in 1994 as an online bookstore. The business quickly expanded, offering customers access to a vast selection of books at affordable prices with expedited delivery.

In its initial public offering (IPO) on May 15, 1997, Amazon issued three million shares at a price of $18 per share, raising $54 million. As of December 20, 2024, Amazon's stock price had surged to $223.29, propelling the company’s market capitalisation to $2 trillion for the first time.

This extraordinary growth is largely attributed to increasing investor interest in technology stocks, driven by advancements in artificial intelligence (AI).

Why Amazon chose to go public and achieved IPO success

Amazon's decision to conduct an IPO was aimed at raising capital to support and expand its business growth. The IPO provided the company with access to financial markets, enabling it to secure funds from public investors. These funds were invested in technology infrastructure and other initiatives critical to ensuring long-term growth. 

In short, the IPO was a strategic move that supported Amazon's ambitious plans and strengthened its position in the e-commerce market, enabling it to expand services in key technology areas such as:

I. E-commerce: Amazon's initial business focused on selling books online.

II. Amazon Web Services (AWS): Serves as a cloud computing platform offering data storage solutions for businesses and personal use.

III. Electronics: Includes the development of devices such as Kindle e-readers and Fire Tablets.

IV. Media and entertainment: Offers services like Amazon Prime Video and ownership of Metro-Goldwyn-Mayer (MGM) Studios.

V. Logistics services: Provides efficient ordering and fast, timely delivery.

VI. AI and machine learning: Focuses on advancing AI-driven innovations and applications.

Amazon's success during Covid-19

During the Covid-19 pandemic, Amazon experienced significant growth instead of setbacks. The company’s profits nearly doubled, increasing by 200%, as the closure of physical stores created a surge in demand for online shopping.

In addition to increased revenue, Amazon expanded its infrastructure by 50% in 2020 and added over 250,000 employees, bringing its total workforce to more than one million.

Why has Amazon grown so much over the years?

Amazon’s growth can be attributed to the company’s four key focus principles:

I. Customer-centricity over competition: Amazon prioritises customer needs, consistently delivering value that enhances convenience and builds trust.

II. Ambition to innovate: Amazon continually introduces new products and services that exceed customer expectations, enhancing both lives and businesses.

Example: Amazon Echo, which sold 22 million units in 2017, and the use of robots in fulfilment centres to improve customer service.

III. Commitment to operations: Amazon focuses on supporting and improving its supply chain daily for the benefit of both internal employees and delivery partners.

IV. Long-term perspective and vision: Amazon builds sound and sustainable financial statements, believing that long-term success and growth stem from increased accountability to customers.

Amazon positions itself as a customer-focused company, a great employer and a provider of a safe workplace.

Prepared by the Securities and Exchange Regulator of Cambodia, Legal Affairs Department.