Amazon in Emerging Markets.

By
Dr. Mahima M Dubey
 Introduction
 Amazon.com was incorporated by Founder and CEO Jeff Bezos
in 1994.
 Started as an online book store expanded to 16 main categories
in 15 years.
 amazon.in (2013)
 11th country specific portal
 19th year of operation.
Why India?
 Booming middle class with high petty buying capacity.
 E- commerce industry potential of 2.3 billion dollor.
(Technopak 2014 video 5)
 52 billion active internet users
 Presence of other e-commerce giants with low market share.
 Technopak in 2013 – India’s e-commerce industry could
grow 61 times in the next decade.
India Entry (2013)
 Presence of Flipkart (2007), Snapdeal & ebay
 Flipkart adopted Amazon model & VC eg. Mytra
 Snapdeal adopted Alibaba model. (marketplace & shipment for a
fee)
Entry Barriers
 FDI norms (Catamaran JV Infosys)
 Poor Infrastructure/driving time
 Lack of all weather roads
 Power failures (2014)
 Address difficulty
 Commercial airfreight delivery
 Reluctance to non cash payments
Myth of best practices (Video 2)
 Role of Amit Agrawal (VP International Expansion)
 Acquiring junglee.com (2012)
 Late entry
 Huge investments
 1,50,000 sq mtr fulfillment centre.
 Launch of ‘fulfillment by Amazon’
 First e-tailer to offer next day shipping
 Introducing pincode and landmark fields
 Pilot service ‘mainstreaming sellers/SMEs’
 Free shipping on orders above 499
 Commission to online publishers
 Started CoD
 Product recommendations
 Started between seller competition
 Premium membership.
What kept it going…
 Maintaining quality of services
 Building trust and reliability
 Offering ease in lieu of money
SWOT
Continuing growth/expansion
 Geographic expansion
 Tried emerging markets as well as established economies
 Horizontal Integration
 Product as well as market expansion
 Vertical Integration
 From manufacturing electronic devices to experimenting drone
deliveries.
Elements of Internatinalisation
strategies
 Location choice
Each market is different, strategy should be tailored according to
the firm, target market, opportunities and constraints.
 Entry mode
Pursuing a marketplace rather than directly selling.
Mostly Greenfield
 Timing
Waited for flipkart to invested heavily through VC
 Scale of investment
Small steps may limit losses but also limit the chances of
succeeding
Success Mantra
 It’s Still Day 1- Jeff Bezos

 Be Customer Centric. (Video 3)

 E-commerce- speed is everything (Video 4)

 Each country’s market, culture, norms, and

competitive opportunities, landscapes vary and
thus affect the strategy Amazon develops and
implement in each distinct market.
So, the question is, what is the process or the methodology being used by Amazon to enter a
new market for example, new geographies or new product-lines ? Do we buy companies?
Do we create companies? There's no one answer because we've done all of them. The
answer is yes, yes, yes. So, for example, China as you mentioned was an acquisition. But
France and Japan, we created it from scratch. UK and Germany were small acquisitions at
that time. So, it's a mix and it all depends on opportunities. For example, we had two
opportunistic situations in UK and Germany. We just picked them up, sometimes you're
lucky, or by what you want to do. And the great example that I give is Japan. Japan for those
who don't know is the land of joint ventures. Everybody is a joint venture in Japan. They all
do things together. And everybody was telling us that if you want to go to Japan, you
absolutely want to have a joint venture. But we did not want to have a joint venture because
we thought we had a clear vision in mind. We did not share that vision with others. We had
assets in mind. And we were very stubborn in building our Japanese operations with our
strategy without using joint ventures. And everybody we were trying to do business with
wanted to have joint venture. The logistic company that had to carry our products to the
customers wanted to do a joint venture. And we said, "No. We just want to buy your
services." So, it really depends on the situation.

By -Diego Piacentini