Does it seem to you that Amazon is everywhere? If you live in the United States, that’s an accurate assessment. But the eCommerce giant doesn’t have nearly the presence in countries beyond its home one. Slowly but surely, though, it’s taking steps to change that.
For people in the United States, it’s easy to think of Amazon as everywhere — because it pretty much is. Beyond the borders of America, however, Amazon is not the ubiquitous presence that it is within them. The eCommerce and Web services giant is working to change that, as evinced by a series of recent announcements touting the expansion of a diverse set of services into new global regions.
Amazon’s growth since its launch in 1994 at the dawn of the Internet has been steady and always calculated. The company realized early on that a one-size-fits-all approach was not going to work when it came to delivering an exceptional eCommerce experience for both sellers and consumers. Understanding the varying needs and expectations of each unique market is key to its success. Here’s what its expansion has looked like in several different regions.
Europe
Amazon has had a strong foothold in Europe since early in its rise to dominance. Europe is densely packed with urban areas and has an established infrastructure of roads, railways, Internet access and robust cellular networks. The European shopper wants fast delivery and a variety of local and international product options.
The recent launch of Prime Now in London marks the first expansion of this same-day, local delivery service outside the U.S. Londoners live a lifestyle marked by convenience and strongly identify with the unique neighborhoods that make up their city’s metro area. What’s more, Amazon was able to replicate its strategy of taking to the subways to ensure speedy delivery of goods, a tactic they first adopted when launching the one-to-two-hour delivery service in select neighborhoods in Manhattan in May 2015.
This swift expansion to an international market is a prime (no pun intended) example of how rapidly a major eCommerce player like Amazon can move a new concept from inception, through testing, to launch — making them a tough act to compete with.
Asia
While widely known for its consumer shopping service, Amazon is also the leading provider of Web services in the world, with its AWS cloud-hosting platform outpacing the competition in storage capacity. Trusted by some of the largest governments and businesses throughout the globe, AWS maintains 11 data centers around the world.
AWS’ recent announcement of a new data center to be built in India by 2016 suggests two things: One, there is a growing demand for secure cloud storage in one of the most densely populated countries in the world; and two, Amazon views the elimination of any latency in the transfer of data within India’s borders as a means of gaining even more traction in the region.
Certainly providing top-tier service to India’s quickly growing business economy will place Amazon in a unique position as new laws and regulations lean ever more in the direction of requiring a “sovereignty” of data in the country in which it originates. Amazon has cited this as a key business concern of its partners in India.
Another pivotal factor in the equation of Amazon’s dominance in Asia is its ability to attract new sellers. This has proven difficult in Asian markets, where capital can be less accessible to emerging businesses and failure rates of new ventures are historically high.
In this arena, Amazon has had to take calculated risks. The company recently announced that it would expand its supplier financing program to eight new countries including India and China. Offering potentially volatile loans to international sellers who require an influx of capital to reimagine their supply chain and increase inventory to meet increased demands is a chance that Amazon sees as worth taking — this despite the fact that foreign markets can be unpredictable, and many in the finance community deem these loans to be high-risk.
In a recent interview with Reuters, Amazon explained that it mitigates risk on these loans by closely examining internal data and because the company takes loan payments out of the sales proceeds that it pays sellers. The service is currently on an invite-only basis and is not open to all sellers on Amazon’s platform.
Last July, just one day after Indian eCommerce player Flipkart announced $1 billion in funding for 2014, Amazon CEO Jeff Bezos answered by injecting double that amount into his company’s own Indian marketplace.
More recently, in China, where the competition for Amazon is a bit stiffer in the form of eCommerce behemoth Alibaba, Bezos took a different route. Rather than trying to beat Alibaba on its own turf, Amazon joined forces with the company and opened a flagship store on Alibaba’s online marketplace, Tmall.
Mexico
Amazon has had to work hard to make inroads with sellers that have long-standing supply chain relationships within their borders. Launched in Mexico on June 30, 2015, Fulfillment by Amazon (FBA) allows Mexican merchants to list items on the Amazon.com.mx site at no cost, while relying on Amazon’s storage, customer service and delivery expertise to fulfill orders for more customers.
Access to this kind of developed infrastructure is a clear win for merchants in Mexico currently maintaining their own websites. Independent eCommerce sites face a slew of connectivity issues, may not be as well-optimized for conversion and can crash should an influx of customers overwhelm inadequate servers — not to mention the cost associated with product storage and delivery that independent merchants have to manage.
These are the sorts of issues that Amazon has spent the last 20 years troubleshooting. As a global leader in eCommerce, Amazon is fundamentally more equipped to manage these issues than smaller independent businesses and even established national and regional chains that might not have resources on par with the company, currently valued around $175.1 billion.
The introduction of FBA within Mexico is expected to allow more merchants to reach more consumers nationally and even internationally, as sellers will also be able to list products on Amazon’s international domains.
To round out our tour of Amazon’s jaunts around the world, we’re led back to another area pretty close to home.
Canada
Amazon first entered the Canadian consumer marketplace in 2002, albeit with a limited offering of products. Over the ensuing years (with a notable acceleration over the last two), Amazon.ca continued to expand its selection.
Just this month, the company announced that it has begun selling footwear and apparel — two of the few holdouts remaining among its offerings — to customers in Canada.
With this move, Amazon — which has its roots in Seattle, WA, not too far from the Canadian border — has brought its original American customers that much closer to their neighbors to the north.
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