Is Amazon now looking to the Food and Pharmacy sector? This is the topic discussed by Willem F. Schol, president of AmericaRetail & Malls.
Amazon’s foray into the food and pharmacy sectors makes it clear that the company is not just looking to participate, but to radically transform the market. According to recent data from Supermarket News, Amazon saw revenue growth of 11.04% during the third quarter of 2024, driven largely by its e-commerce food and pharmacy divisions. But behind these numbers, there is intrigue about whether we are witnessing an unstoppable advance or the beginning of a problematic concentration of power in access to essential services.
Amazon’s success is actually very clear: the marriage of advanced technology and its ability to analyze and predict consumer behavior so accurately. Thanks to artificial intelligence and the use of big data, Amazon not only understands what customers want, but can also anticipate their needs, creating a system in which the convenience of a click becomes an irresistible temptation. In a post-pandemic society that values efficiency and convenience, Amazon is proving to be the perfect solution. But what is the price for the rest of the commerce and health ecosystem?
Its expansion into the pharmaceutical sector, with Amazon Pharmacy and the opening of 20 new cities by 2025, is seen as a logical tactic in its ambition to offer everything in one place. However, this move also raises important questions. Is it healthy for the consumer for a single company to dominate both access to food and medicine? Although Amazon claims that its mission is to improve accessibility, the reality is that its strategy greatly increases its control over the consumer experience in such critical areas as health.
In addition, as Amazon uses its advanced technologies, significant risks arise relating to privacy and the handling of sensitive data.
In the pharmaceutical sector, a failure to protect customer information could have serious consequences. Amazon must be sure that its ambition does not compromise the trust of consumers, who, if any mishap occurs in the handling of their personal information, could become distrustful of the company.
Meanwhile, competitors like Walmart and Costco are trying to counter Amazon’s advance by investing in their own digital and delivery services. But clearly these efforts go beyond competing on convenience and price; at stake is also the diversity of consumer choice and the balance of power in a market increasingly dominated by tech giants.
Amazon has shown that it has the capacity to be a leader in the pharmacy and food sectors, but the big question is whether this leadership will translate into an insurmountable dominance for the rest of the industry.
Technology and markets
Technology plays a key role in reducing trade frictions. During the COVID-19 pandemic, technological advancements such as e-commerce, cloud computing, digital payments, the Internet of Things (IoT) and 5G have significantly changed international trade.
Artificial intelligence (AI) is already being integrated into different processes related to trade, while virtual reality, robotics, and 3D printing are expected to become increasingly integrated into trade in the medium term.
Recognizing the potential of these technologies to improve the efficiency and inclusiveness of international trade, the World Economic Forum and the Ministry of Economy of the United Arab Emirates (UAE) and the Department of Economic Development of Abu Dhabi, launched the Trade Tech initiative.
