Projects
Founded in 1994, Amazon began as a small online book retailer before expanding into a broader market. Amazon began to sell a variety of everyday goods like groceries, clothes, movies, house appliances, and more. According to ‘Amazon in emerging markets’ by Mary Baldwin college. The author states that “early in 2000, Amazon hired Piacentini, previously Apple’s general manager for Europe.” Since hiring Piacentini Amazon has expanded to various countries. For example, Italy, France, Japan, India, China, Australia. Expanding worldwide was a success for Amazon because they were able to adjust to different cultural settings, foreign regulations, and allowed them to develop new strategies to promote their business while drawing in a diverse audience.
The Chinese market is one of the foreign markets Amazon successfully immersed in. According to a Mary Baldwin college case study, ’‘Amazon’s share of Chinese business to consumer e-market stood at a mere 3.5% at the end of 2012’ but they made it to the top five e-commerce websites in 2014.” Amazon did not make number one when competing against Alibaba, Eachnet, Jingdong Mall, but they did make a list of the top five e-commerce companies. They were able to do this by slowly integrating itself into China's markets. After acquiring the company Joyo.com. Joyo.com was an online store for books, music and media in China, similar to amazon when they first started up. “They operated under Joyo.com brand name offering books, DVDs and CDs in China's largest cities before expanding to electronics , baby products , beauty care and watches. As Amazon entered the Chinese market they went through various names, such as Joyo.com, Amazon.cn with Joyo Amazon as its name, later changing the name to Amazon China once the brand was fully successful. They also worked on having in-house deliveries and overnight shipping making shopping more convenient for the buyers. In this way, they were able to ease customers into Amazon, since customers did not view the company as an international company at the time. Another way Amazon was able to pull a diverse group of customers in was by offering free shipping to people who shopped on their site. The site's algorithm would show customers product recommendations based on their previous purchase history which could draw a customer to shop at Amazon again in the future.
During their time in foreign markets, Amazon was able to make sensible entry choices in the markets they were investing in. When joining a new market Amazon took into account various matters, For example. when the market was expanding, the cultural differences of each country, and foreign regulations a country might have. In China, the shopping market began to take off in 2002. Amazon later joined the market in 2004, as online shopping was in the middle of developing in China. Considering the preferences of customers in these given countries was essential when Amazon entered these markets. In both China and India, many citizens were uncomfortable paying for items before having a credit card. To accommodate this Amazon was able to adapt Joyo.com’s cash-on-delivery option, allowing customers to pay as they receive the item through cash rather than a credit card. Lastly, when moving into a new market Amazon has to abide by foreign rules and regulations in mind to run their business in the given countries. India was one of the many countries with strict foreign direct investment laws. For instance, there is an FDI law that forbids foreign retailers from investing 51% in a company because of regulations like these. Amazon was forced to come up with a new strategy to ease itself into the Indian market. Lastly, Amazon also has to keep in mind the environmental setbacks in the countries they wish to expand. In places like India, the roads tend to be more on the rocky side causing difficulties when driving on certain roads or rainy days. To provide their service in these countries Amazon must be ready and willing to adjust to conditions like these when delivering their services.
An Early mover is when a company is the first to create a certain type of product or service because they are the first to make the item or service they receive the competitive advantage of creating this product or service before anyone else. A Later mover is the opposite, it is when a company makes an item or service in an industry after other companies have made the item or service. Some of the disadvantages of being early movers are: Since early movers are first to create the product, they are the first to conduct research and make the product. This research can be very time-consuming and costly as they may need to spend a lot of money on the research to develop the product. Another disadvantage is while in the early stages of creating the products, early movers often face familiar and or unfamiliar regulations. To continue making the product they adapt to these regulations. Because early movers are making these products for the first time, they are more likely to discover flaws after they have released the product. For example, when Apple released the Apple iPhone 15 many customers found out that their iPhone had a bending problem and as a result could not use their new phone. Although being an early mover has its disadvantages it has its advantages. Since early movers are the first to create the item, they can choose the market price. Whether they want the good to be a luxury good or a common good that is cheap and accessible for all customers. In addition, they receive recognition for their creative work and are the first to get customer's feedback and improve on it in their next release.
One disadvantage of being a late mover is that they often invest more money into marketing their service without a guarantee that the ads will attract viewers and customers. Latecomers have a harder time differentiating their products because there are already similar products on the market. Lastly, When the brand is unfamiliar to the audience, it may be difficult to gain customer loyalty. Though being a late mover has many disadvantages it also has some benefits. Learning from early movers can help late movers in the long run. Being able to analyze their mistakes, and learn from them late movers can make better quality items that will attract an audience of people. When Amazon was moving into the Indian market they experienced the late mover advantage firsthand as they came into the market five to nine years after their competitors they were at an extreme disadvantage which is why Amazon invested a larger amount of money in their logistics and into Junglee.com, a product review site to understand the Indian market and come up with the best strategy to lure customers in.
Amazon is at a point where it should enter additional markets immediately. As they reached China's market in 2004 and India’s in 2013, the company has had ample amounts to expand and improve their markets in those countries. If they were to expand into another market, I would suggest Ghana as the country is similar to how India was when Amazon first committed to expanding there. This makes approaching this market easier, as Amazon has dealt with something similar in the past. Now is one of the perfect times to invest in Ghana as the country is starting to develop more, with trades between different countries flowing, shopping malls, food delivery and online markets are starting to expand as well. It would be a perfect opportunity for Amazon to grow even more international. Although some roads in Ghana are not fully developed because of this they are often rocky and bumpy, many delivery services use motorcycles to deliver their services so amazon could consider using them.
Works Cited
Michigan Ross of Business. (2019). Amazon In Emerging Markets.