As we all know Amazon is one of the leading companies in e-commerce and is considered the best platform for a lot of things that include streaming, cloud, advertising, and many more. In the past years, Amazon has bought many subsidiaries and brands. The benefit of buying subsidiaries or brands is that you get 50% of the shares of that brand. This technique has also helped Amazon a lot in growing. As we have told above Amazon owns a lot of subsidiaries and brands and we cannot explain each one of them, so some of them are explained below.
Subsidiaries Of Amazon
Amazon has done a great investment in this part, it has bought a lot of subsidiaries to make its position powerful in the market. The most famous subsidiaries of Amazon are:
Whole Food Market
The whole food market is based in Austin, Texas, and is a USDA-certified organic grocer. The whole food market was a famous and successful company, its sales were enough that it earned a $10 billion market cap and got 176th position on the fortune 500 lists. In 2017, Amazon bought this company for $13 billion and this was the most expensive acquisition of Amazon.
There are multiple reasons behind buying the whole food market. First of all, it gave Amazon a strong position in the grocery market. It takes a lot of time to get to this position but Amazon got there overnight. Amazon can compete more in groceries with the help of deal dollars.
And it helped Amazon in obtaining multiple locations because the whole food market has got 460 stores and all of them are situated at great locations which help Amazon for growing its footprint.
Zappos is one the most famous and successful companies for its online business as a footwear retailer. It was founded in 1999 and was bought by Amazon for $1.2 billion in 2009. Zappos had a great position before becoming a subsidiary which helped Amazon a lot.
Amazon made its way into the footwear market through Zappos and handled its great position perfectly. Zappos had excessive and good relationships with the suppliers and had grander apparel for online shopping as compared to the template Amazon.
By buying Zappos, Amazon made sure that it never crosses Amazon and helps in growing the name of Amazon. Zappos was a great help to Amazon in expanding itself into the footwear market.
Amazon Robotics (Kiva Systems)
In the start, Amazon Robotics was known as Kiva Systems. It was a company that provided retrieval systems and automated storage to numerous corporations that includes Crate & Barrel, Staples, The Gap, Gilt Groupe, Office Depot, etc.
Amazon bought Kiva Systems for $775 million in 2012 and changed its name to Amazon Robotics. After this acquisition Amazon allowed all the manufacturer’s previous contracts to expire, which means that the robots of Kiva will operate exclusively at the warehouses’ Amazon.
In other acquisitions, Amazon joined them with themselves and expanded its position with them, but in this acquisition, Amazon did not integrate Kiva Systems or used it in its e-commerce platform. It kept Kiva Systems for its internal support. It is also said that Amazon Robotics will play a vital role in the automated delivery services of Amazon.
Pillpack was launched in 2013 and was famous for its online pharmacy. It delivers its medicines over the country online and does not cost any shipping charges. This company was acquisitioned by Amazon in 2018 for about $753 million.
Orders are delivered by Pillpack in pre-sorted packets, not only that but it also sells items from other pharmacies such as inhalers, eye drops, insulin, and creams. The work of Amazon Pharmacy is to take medication orders in recurring prescriptions and bottles. Pillpack also recommends the Amazon Pharmacy to those people who hold recurring prescriptions or have an Amazon account.
The purpose of the acquisition with Pillpack of Amazon was to put a foot in the medicine market and gain a position in pharmacy services. Pillpack now takes products from Amazon and delivers them across the US overnight.
These were some of the subsidiaries and brands of Amazon. Amazon acquisition with each of them for a reason and the reason was to grow its name by stepping into other markets. As we know, it is very difficult to be successful in a new market so Amazon took a shortcut by acquisitioning with other companies and this strategy proved to be very successful for Amazon.