Amazon owns over 40 subsidiaries, including Amazon Web Services, Audible, Diapers.com, Goodreads, IMDb, Kiva Systems (now Amazon Robotics), Shopbop, TeachStreet, Twitch, Zappos, and many more.
Key Takeaways
- Amazon’s business offerings include movies, web services, TV shows, music, and e-commerce
- Five of Amazon’s most important acquisitions are Zappos, Twitch, Whole Foods Market, Kiva Systems, PillPack Inc., and MGB Holdings, Inc.
- Amazon bought Whole Foods Market for $13.4 billion in the year 2019 and it is the biggest reported acquisition in its history in terms of price
- There were 3 acquisitions of Zappos before it was bought out altogether by Amazon in 2009
- Amazon acquired PillPack in 2018 and is an e-commerce firm that lets customers order their prescriptions online
The Table Below Contains 5 Top Amazon Subsidiaries And Their Basic Information.
| Amazon Subsidiaries | Type Of Business | Acquisition Price | Date of Acquisition |
| Whole Foods Market | Organic grocery store | $13.7 billion | August 28, 2017 |
| Kiva Systems | Robotics | $775 million | March 19, 2012 |
| Zappos | Footwear & apparel retailer | $1.2 billion | November 2, 2009 |
| MGB Holdings | Production& distribution of films and TV content | $8.5 billion | May 26, 2021 |
| PillPack Inc. | Online Pharmacy | $753 million | June 28, 2018 |
5 Top Amazon Subsidiaries
Whole Foods Market
Whole Foods is an organic foods supermarket with many stores in the U.S., U.K., and Canada. It’s also one of the few American retailers that offer its own certified organic products, which it buys from local suppliers. The company was named after the concept of whole foods described in marketing as fresh produce, meat, and dairy products with no artificial additives or preservatives. The company grew significantly under John Mackey’s leadership when it went public in 1997 and continued expanding to become a $10 billion brand by 2017. Consequently, Amazon bought the company for $13.4 billion just two years after that milestone was reached! Since then, discounts have been added on some key food items like milk or eggs during Amazon Prime subscription free shipping weeks [see some examples].
Amazon bought Whole Foods Market recently and it is now the biggest reported acquisition in its history in terms of price. Since Amazon acquired Whole Foods, customers can now order groceries online and choose between having them delivered through Amazon Fresh or picking them up at their local store. While there are only 13 locations that currently sell groceries by Amazon Fresh, many more stores will be rolled out in the future to reach a broader market.
However, Amazon has yet to see any significant return on its investment in Whole Foods. Since the grocery chain’s acquisition by Amazon, the company’s physical-stores segment has struggled to achieve consistent revenue growth. Sales from this segment declined 16% year over year during Amazon’s 3Q 2019 earnings report.
Zappos
Zappos is the leading online shoe retailer in the world. The company was founded by American entrepreneur Nick Swinmurn in 1999 and went through 3 acquisitions before being bought out altogether by Amazon in 2009. Zappos prides itself on providing its customers with exceptional service and has a novel approach to handling customer complaints – they pay their employees up to $2,000 to leave the company if they are not completely happy working at Zappos!
In 2010, CEO Tony Hsieh released his management memoir, titled “Delivering Happiness”, which details his unconventional company practices including spending $350 million to acquire a corporate campus of 11 downtown Las Vegas buildings so that employees would work more closely together and become more collaborative as a result (the idea worked!). Forbes believes Zappos made $2 billion in revenue during 2015. Zappos did what Amazon could not at that time – they were the first online shoe retailer to offer free shipping both ways, a 365-day return policy, and a 100% satisfaction guarantee.
Kiva Systems
Kiva Systems, now Amazon Robotics, was acquired by Amazon in 2012. The company produced products that streamline a variety of other businesses. Founded in 2003, the company remained independent for seven years before it was bought out by Amazon.
Kiva Systems seems to be a lot different from the products it offers when compared with Amazon’s other subsidiaries. Amazon has not integrated Kiva’s products into its platform of e-commerce offerings, as it has done with other acquisitions. While Kiva’s role remains unclear, its specialization in automated storage and retrieval systems could very well prove to be a huge benefit for Amazon’s logistics operations, which include thousands of robots that aid the company’s delivery services.
PillPack Inc.
Founded in 2013 and acquired by Amazon in 2018, PillPack is an e-commerce firm that lets customers order their prescriptions online, receives them at a designated pharmacy, and delivers them to the doorstep. In an effort to keep up in the increasingly competitive world, Amazon had looked into acquiring competitors such as Aetna or Cigna Corp but failed.
PillPack was seen as a better fit due to its advanced systems which kept track of prescription drugs among individuals and made it easy for pharmacies to provide bags from one delivery area to another quickly. These are just some of the innovative features which allowed PillKit to stand out from others. By combining physical pharmacies with digital technology Amazon could now go about selling medications on its website.
By leveraging Amazon’s extensive delivery network, the acquisition of PillPack promotes speed and efficiency when it comes to shipping prescription medications to customers across the country. Because PillPack has retained its brand after its acquisition from Amazon, the process of ordering prescription medications is more convenient for existing customers with preexisting prescriptions at PillPack dot com where they can access their documents as long as they have a valid email address.
Twitch Interactive
Twitch Interactive, which specializes in developing live streaming platforms, launched its first product called Twitch in 2011. While there were competitors in the marketplace with similar services at the time of launch, this platform grew and established itself as a top-10 website by 2014. Twitch has been a popular brand among Amazon’s consumers, but the company recently debuted an exclusive platform for video game streaming and other forms of entertainment.
MGM Holdings Inc. (Acquisition Pending)
MGM Studios has been around since 1924, evolving from Metro-Goldwyn-Mayer. Today, it owns one of the largest libraries of film and television content that has ever been produced. The company is also known for owning two well-known franchises: James Bond and Rocky.
Amazon recently announced that they will be acquiring movie studio MGM; a deal which is valued at 8.5 billion dollars. This purchase would prove to be Amazon’s second-biggest acquisition after its latest bid for Whole Foods, which also faced scrutiny concerning its potential risk to competition in the supermarket industry. The company in charge of approving this acquisition is the FTC, whose new chairwoman has been an outspoken critic of Amazon’s recent acquisition strategies and their possible effects on competition throughout various industries.
The acquisition of MGM is likely to boost Amazon’s Prime Video service, but what exactly does that entail? In the streaming media war, the players are large names like Netflix Inc., Disney, and WarnerMedia. There’ll be a new entrant this year too, once the AT&T and Discovery merger goes through. Amazon already has distribution deals in place, but stronger ties with MGM would allow it to compete better with heavyweights like Netflix and Disney, which are currently investing heavily in original content.
Conclusion
Amazon owns several subsidiaries. They include Amazon Web Services, Audible, Diapers.com, Goodreads, IMDb, Kiva Systems (now Amazon Robotics), Shopbop, and TeachStreet. And don’t forget Zappos! Hope you were able to get reliable background information on each of Amazon’s subsidiaries as well as an overview of how they operate in their specific niche today.
References:
https://www.investopedia.com/articles/markets/102115/top-10-companies-owned-amazon.asp
https://www.amazon.jobs/subsidiaries
Last Updated on November 14, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.
