Amazon's Transition into Healthcare
An acquisition worth $3.9 billion shows is pivotal in the company's goal
Just when you thought Amazon was invested in just about everything, they’re making a transition that will accelerate their dominance in yet another sector.
The acquisition
Yesterday, Amazon announced that it would be acquiring 1Life Healthcare (ONEM), for about $3.9 billion. Shares were up about 60%, and the valuation of this tiny little company soared. Not only does this mean that Amazon is diversifying its businesses, but this also signifies that this industry, even after the pandemic, is gearing up to become something much, much bigger.
Why this is significant
Amazon in recent years has begun to branch out from its core business of e-commerce for retail to several other sectors including groceries, healthcare, lending and more, and then disrupt the industry by adding in the power of their e-commerce solutions and unparalleled logistics. In some instances, this has been amazing, with the effects including wiping out several companies, but in other instances, these efforts have become disasters, which include shutting down their operations within that sector. The difference is, Amazon seems to be particularly set on this sector/industry, which is definitely different from Amazon’s past forays into new areas. The once highly popular telehealth sector blew up after things got back to somewhat normal, as people looked forward to talking to their doctors without accidentally hanging up. However, with this acquisition, Amazon appears to be quite confident in this innovation.
Amazon becomes more and more prepared to disrupt something huge
Amazon has slowly been building its arsenal of tools to win over customers in the crowded, stuck in the past healthcare sector. But, you would think that this would be a waste of $4 billion dollars, but its actually not. Here’s why:
Although no one might actually want the future to be telehealth, it is coming - fast.
This will be a pivotal point for the sector, especially because a corporation is stepping up to push the industry forward
Everything is likely to become more simple and seamless as Amazon is becoming the only necessary destination for healthcare
“We think health care is high on the list of experiences that need reinvention. Booking an appointment, waiting weeks or even months to be seen, taking time off work, driving to a clinic, finding a parking spot, waiting in the waiting room then the exam room for what is too often a rushed few minutes with a doctor, then making another trip to a pharmacy – we see lots of opportunity to both improve the quality of the experience and give people back valuable time in their days,” says Neil Lindsay, Senior Vice President of Amazon health services.
Amazon sees lots of room to improve, but the only thing stopping them from becoming dominant in healthcare is the consumer demand, which is lacking at the moment.
What do you think about this transition? Let us know in the comments.
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