AMAZON IN PAKISTAN

ASSIGNMENT NO:02

INTRODUCTION OF AMAZON.COM

DECEMBER 5, 2021
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Amazon is the world’s largest online retailer. The company was originally a book seller but
has expanded to sell a wide variety of consumer goods and digital media as well as its own
electronic devices, such as the Kindle e-book reader, Kindle Fire tablet and Fire TV, a
streaming media adapter. Amazon (Amazon.com) is the world’s largest online retailer and a

prominent cloud services provider. 

The company was originally a book seller but has expanded to sell a wide variety of
consumer goods and digital media as well as its own electronic devices, such as
the Kindle e-book reader, Fire tablet and Fire TV, a streaming media adapter.

Amazon Web Services(AWS) is a comprehensive, evolving cloud

computing platform. The first AWS offerings were launched in 2006 to provide online
services for websites and client-side applications. Amazon’s Elastic Compute Cloud
(EC2) and Simple Storage Service (S3) are the backbone of the company’s large and
growing collection of Web services.

Jeff Bezos incorporated the company as Cadabra in 1994 but changed the name to Amazon
for the website launch in 1995. Bezos is said to have browsed a dictionary for a word
beginning with “A” for the value of alphabetic placement.  He selected the name Amazon

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because it was “exotic and different” and as a reference to his plan for the company’s size to
reflect that of the Amazon River, one of the largest rivers in the world.

Amazon is headquartered in Seattle, Washington. The company has individual websites,

software development canters, customer service canters and fulfilment canters in many
locations around the world.

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PAKISTAN IN PAKISTAN:
Amazon includes Pakistan in its sellers list

Pakistani sellers can now create their IDs on the e-commerce platform to sell their products
worldwide.
Adviser to Prime Minister on Commerce Razak Dawood announced on Thursday that
Amazon is going to add Pakistan in its sellers list within a few days, opening new
opportunities for the country’s youth and small and medium enterprises (SMEs).
Pakistan is the only South Asian nation which is not included in the list of 102 countries on
Amazon’s platform, despite being one of the biggest manufacturing economies in the region.
Last year, the United Nations Conference on Trade and Development (UNCTAD) ranked
Pakistan 116th in the 152-nations B2C E-commerce Index.

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“We have finally made it; Amazon will be adding Pakistan to its Sellers’ List within a few
days,” Dawood tweeted. “We have been engaged with Amazon since last year and now it’s
happening, he added. “It is a great opportunity for our youth, SMEs and women
entrepreneurs… It is an excellent opportunity for our youth, SMEs and women
entrepreneurs,” Dawood said.
The adviser to the prime minister on commerce said that Amazon’s listing was an important
milestone of the government’s e-commerce policy, which has been achieved through
teamwork by many people across the globe.
According to Noman Ahmed, the Chief Executive Officer of the Si Global, Amazon has an
inventory of about 12 million items across all its categories and services. “The Amazon’s
share in the US e-commerce market is 45%, which can be explored in an open competitive
environment,” he said.
“It is a massive incentive for Pakistani manufacturers,” Ahmed said. Nouman Younas, digital
media marketer, added that the Amazon update is not only a good new for the business
community but the freelancers are also delighted.
With the arrival of Amazon in Pakistan, job opportunities in Pakistan will increase and small
and big business owners will be able to benefit from it, which is a welcome development,
said Muhammad Adeel, E-commerce and Digital Media Manager. “E-commerce sector will
also boom,” he added.
Amazon’s global net revenue increases by approximately $45 billion on a year-on-year basis.
“Amazon is a corporate giant and Pakistan being recognised by it will result in exponential
economic growth,” Ahmed said.
Pakistan’s e-commerce market size posted a growth of over 35% in the first quarter of the
current fiscal year to Rs96 billion, compared with Rs71 billion over the corresponding period
of the previous year. Hence Pakistan is also speedily becoming a hub to enable the growth of
this sector.
Meanwhile, the National Institutional Facilitation Technologies (NIFT) is in the process of
developing a payment solution for international payments in collaboration with the State
Bank of Pakistan (SBP).
“We are entering into a competitive world which means more people are expected to join the
bandwagon and that will further increase competition at a global scale,” Ahmed said.
“Entering into this world alone is not the key, people should go for online training to
understand the dynamics of an online marketplace and devote themselves to revolutionising
the e-commerce world of Pakistan.”

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Amazon.com Online shopping trends in Pakistan

The fact that the new online marketplace is expanding and consolidating itself is reflected in
the growth of numerous C2C (consumer-to-consumer) and B2C (business-to-consumer) start-
ups, focusing on online marketing and selling and offering a wide range of products -
fashion-wear, footwear, casual clothing, jeweller, electronics, computers, handsets, books,
gifts, toys, and what not - to be sold and bought online.

“The investments made by the global firms show their confidence in the future of e-
commerce in this country,” argues Ahmed Jahangir, managing director of kaymu.pk, one of
the fast growing online marketplaces in Pakistan, in an interview with Dawn. As popularity
for E-commerce nurtured in Pakistan and a number of online shopping websites popped up,
Pakistan started experimenting with other models of payments as well, which provided the
convenience for job. People are perpetually short of time and want to devote their focus on
compelling activities rather than having to do mundane tasks like doing groceries, spending
time at the mall shopping for items. Especially when they have the option of online shopping,
if you are a working woman living in Pakistan, you would understand that managing both the
house as well as the office drains out all your energy. It is for this reason online shopping is
picking up in countries like Pakistan.

Now you can leave the hassle of tangible purchase and carriage of shopping to the seller.
With a simple laptop, cell phone and a Wi-Fi you have the world in your hand There are
several factors that have impacted growth of e-commerce industry in Pakistan; some f them
are, availability of fast-speed internet to a limited segment of population, power shortages,
lack of public trust on portals conducting e-commerce and awareness about the online
marketplace, payment solutions, and delivery logistics infrastructure. Since most people do
not have access to credit or debit cards or do not want to use plastic money for shopping only
owing to security concerns, majority of e-commerce companies like kaymu.pk have adopted
the ‘cash on delivery’ model.

Marketing Strategies of Amazon.com

In the digital world, the customer is more aware than ever before. Customers don’t only buy
products online, but they also look for relevant information before buying a particular
product.

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Amazon sells more than 12 million products which include books, cookware, home
appliances, and media services. It is a great platform for start-ups and established businesses
to sell their products and services. If you want to sell your product on Amazon, consider the
services of a Full-service digital marketing agency.

We help you optimize your Amazon product page. We capture the attention of your
customers by promoting your product from different angles. We also upload attractive visual
images of your products on Amazon. We highlight the key selling points of your products.
We give your visitors an in-depth view of your product’s features, specifications, and
advantages.

Product: Selling products in the category of books, clothing, footwear, jewellery, accessories
of Men, Women and Kids, tools, technological gadgets and much more.

Price: It offers products at low prices. (As they claim “everyday low prices” and follow cost
leadership strategy)

Place: It brings products form different manufacturer to their warehouse and then to their
online web portal and then delivers directly at the doorstep of customers.

Promotion: It promotes through advertisements on various websites, Social Platforms, via

providing discounts/offers and through weekend, annual and seasonal sales.

User Behaviour

New vs Return Traffic: While conducting analysis of Pakistan’s e-commerce trends with
respect to user behaviour, it has been concluded that the conversion rate of returning visitors
has remained double than the first time visitors.

To be more specific: it is 98.5% more than that of the new customers. Moreover, the average
session duration for the new visitors is 3 minutes, whereas for the returning visitors, it is 5
minutes. There are several reasons for high session time7 and better conversion rate for return
visitors. A few important reasons are: Out of the total e-commerce visits in a year, 56% are
estimated to be new visitors, whereas the remaining 44% are returning visitors. One of the
reasons for considerably good percentage of returning visitors is the low number of e-
commerce competitors in Pakistan. Visitors have limited options available for online
shopping stores.

SWOT ANALYSIS:

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STRENGTHS:

STRENGHTS:

 Huge varsity of products

 Ability to cater large orders
 Up to date technology and software
 High brand name recognition
 Corporate culture
 High inventory turnover
 Large warehouse

WEAKNESSES:

 High inventory risk seasonality

 Lack of customer database
 Unfamiliarity with culture
 Unestablished delivery network
 Small number of vendors

OPPORTUNITIES:

 Emerging online shopping trends

 Rapid increase in Internet users
 Customer spending increased
 Broadband access technology
 Online sales predicted to increase

THREATS:

 Law and order situation

 Poor infrastructure

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 Low protection against cyber crimes

 Aggressive competition
 High interest rate

Competitive and Industrial Analysis of Amazon:

Amazon is one of the best online marketplaces that you can use to sell and buy products. It
opens the door to millions of sellers online to help them grow economically and promote
their products in international market. As a seller on Amazon, you get a large customer pool
to sell your products to expeditiously.

Amazon has recently announced that it will now allow Pakistan sellers to sell their products
on Amazon. This great change makes it a right time for any Pakistan seller to build their
brand to maximize their reach and exposure internationally.

It has been reported that almost 70 percent of textile products are taken from Pakistan by
other sellers from different regions. So, the fact that Pakistan provides one of the best textiles
in the world will help local businesses get a boost directly from now on. This will not only
benefit sale of textiles but other commodities too. However, in the garment industry, Pakistan
may face some issues in breaking into the biggest fashion brands as it competes with
Bangladesh, India, China, and Thailand. Pakistan is still a minor player and will need to
majorly improve to ensure a better position.

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Some of the best products one can sell on Amazon include textiles, electronics, toys &
games, books, video games, clothing, shoes, jewellery, fitness items, cameras, home
equipment, kitchen utensils, hand tools, and much more. If you are planning to start being a
Pakistan seller on Amazon, you better choose from any of these niches. With the variety of
sellers on Amazon, you just need to have unique products to stand out from the crowd.

Before choosing a specific niche, you need to know what kind of products you can source
easily and what you have enough knowledge about. This is because you need to have great
products to prevent your seller account from being closed down because of bad products/
reviews. If you start a reputable store it will help build your customer pool and lead to more
revenue.

Business Model:

Some of the most in-demand business models you can choose from are Private Label
Wholesale, Reselling, Drops hipping, and handmade. Choose a fulfilment method. It can
either be fulfilment by Amazon, in which as a seller you ship to Amazon’s warehouse and
they sell the product directly to the customer. Or it can be fulfilment by the merchant where
you store your products and send them directly to your customers.

To succeed as an Amazon seller from Pakistan, you need to first study competitors from your
specific niche. Get to know what they are doing to be on top of the selling list. Look at the
best sellers as well as the best selling products. Do market research before settling for a
certain product because if there is low demand, you will go at a loss when no one is willing to
buy it, and so it will stay in the warehouse for long. You can use a combined product listing
to invite more buyers. To initiate, start with few products, and then with time you can scale
up and add more products as you grow. You can start with a unique brand that will help you
stand out from the other sellers. To rank better use great product images, optimized titles, and
descriptions. This will help your product to be easily visible.

Amazon Marketing Services (AMS):

On top of that, you can utilize the Amazon Marketing Services (AMS) that help you create
ads for your products so that users can see your products under products related to this item.
This brings great exposure. However, you should still be vigilant while selling items on
Amazon. If you provide the wrong information, your account can easily be blocked.
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Pakistan’s government had engaged Amazon last year about the issue, and it has finally
succeeded. This great move will lead to favourable outcomes for the youth as well as small
and medium enterprises to sell on the Amazon platform. This will add Pakistan sellers into
the international market.

Impact The Economy:

Pakistani sellers selling on Amazon will impact the economy in a positive manner. This is
because unlike before, where Pakistan sellers used to sell through third parties, they will now
be able to sell directly. This will help boost the economy and create more job opportunities.
Hence, entrepreneurs will have a greater customer base. With such a change, the capacity of
the youth needs to be built so that they can use Amazon and other e-commerce platforms
effectively, to maximize their revenue stream. This includes checking the various tutorials
that will help empower on how to use the Amazon seller’s account.

Increased empowerment will make more people use Amazon for selling which will create
more opportunities. Let’s assume 100,000 Pakistani residents start making money through
Amazon selling. With each person earning a minimum of $500 per month, after a year it will
have a great impact on the economy. This will lead to a lot of sustainability and efficiency.
Statistics show that India ranks at number 5 in countries with the largest numbers of
successful Amazon sellers. A 2019 report showed that there were over 209,000 active
Amazon sellers from India, and the numbers have risen in 2020. Moreover, there have been
over 70,000 Indian exporters selling millions of ‘Made in India’ products on Amazon
websites. India’s largest marketplace on Amazon has over 320 million monthly visits.
Amazon was approved in India back in 2012 and the Indian government allows foreign
companies to sell on their platform. However, selling on Amazon India is only limited to its
residents, so brands need to get a local distributor to sell on the marketplace.

Pakistan being approved to sell on Amazon will have a great impact on the economy and will
help in the growth of the country. Even with the great move, though, Pakistan sellers need to
prove themselves to ensure they remain part of the Amazon community. To keep up with
people from other areas, they will need to provide quality items for the benefit of everyone.

The government should start capacity-building programmes for the youth so that they can
learn how to use Amazon in the best possible way. There are different on-going youth
development programmes, and with this great change, it is the right time to add Amazon

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selling tricks & tips as a normal course. Universities need to add entrepreneurship and e-
commerce selling on Amazon to their curriculum. These initiatives will undoubtedly serve as
the stepping stones for the success of our youth and the economic development of our
country.

Example:

FBA (FULFILLMENT BY AMAZON)

Fulfilment by Amazon (FBA) is a service Amazon launched back in 2006. It provides
convenience to third-party sellers, allowing them to automate their order shipping and
fulfilment services. The sellers can leverage the vast network of Amazon with FBA to store,
pick, pack, and finally ship the product.

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In easy words, sellers will sell while Amazon will ship the order for them. All this in a
predictable fee! If you are enrolled in Amazon FBA, only then the platform will handle your
shipping necessities, including refunds and returns. Amazon will not just ship for you, but
also pick from the warehouse and pack it for you.

Amazon FBA will provide its third-party sellers with:

 24/7 Amazon customer service.

 Some fees that will include fulfilment and shipping cost (like picking, packing, and
shipping).
 Phenomenal access to the world’s most popular and fulfilling network.
 Once goods received from the seller in the warehouse, Amazon will design, brand,
and pack the order.
 Amazon will pick the order and arrange transportation of the goods while ensuring
proper shipment.
 Amazon will manage all the interaction with the customer and take care of after-sales
support
 Pakistani seller relaxing at home while Amazon FBA taking care of everything.

Impact of Amazon FBA in Pakistan

Pakistan has recently bagged a position on the Amazon platform as an approved seller. Many
businessmen were dreaming for this day, and finally, the dream has come true. This positive
news doesn’t mean a lot for Pakistani consumers. However, it’s a perfect opportunity for
Pakistani merchants to expand their business in the international market and beat the
competition.

The majority of business-minded people and economists are aware of Amazon and its
phenomenal operations across the globe. However, before the approval, it was difficult for
Pakistani sellers to establish themselves on the platform. Most importantly, they were
shipping orders from Pakistan which was resulting in higher costs.

But now after getting access to Amazon and its unique Amazon FBA platform, selling will
become much easier. The sellers have to send their Pakistani inventory via Amazon FBA to
their warehouse and wait for orders to come. Amazon is a popular platform known for selling
at lower rates. Thus, the local merchants can go for thinner profit to break into the market,
defeat the competitors, and earn a reputable spot.

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Currently, there are more than 2 million sellers on the Amazon platform, selling their
products. With Amazon FBA, Pakistani merchants can enter the market and capitalize on
their products. The sellers will save money that they were spending before when shipping
from Pakistan. And most importantly, trying to take care of the shipment. With Amazon
FBA, all these worries are embraced by the platform itself, allowing the third-party sellers to
sell and make a profitable business.

Advantages of Amazon FBA in Pakistani Market;

If we are talking about Amazon FBA in Pakistan, then there are numerous advantages for the
sellers. Some are direct benefits while others are indirectly related.

 Pakistan was initially banned by Amazon due to the poor quality of products being
sold via their platform. However, if the sellers choose Amazon FBA, they don’t have
to worry about quality concerns. FBA itself approves the products after vigorous
quality assurance.

• Before Amazon FBA, the sellers used to worry about the delivery of the product and
had to deal with its fragility concerns. But Amazon FBA takes care of the packaging,
delivery, and assurance of the product to reach its destination intact.

 Amazon FBA doesn’t charge any fees for the storage of inventory and shipping the
products. Therefore, sellers can remain stress-free from the recurring expenditure.
Sellers can pay a collective amount to Amazon FBA that will bear their expenses. The
seller will save money in shipment, packaging, and storage.
 Once enrolled in Amazon FBA, the seller can minimize their efforts. They simply
have to take care of the communication and sales with the customer. Once the order is
confirmed, Amazon FBA will take the strain on its shoulders.
 Before Amazon FBA, sellers had to take tension of every step. But with FBA, the
sellers can relax without worrying about the time and quality of the product.
Everything will be done by a trustworthy retailer.
 Buyers from all over the world trust FBA and Pakistani sellers can take advantage of
it. The buyers will trust them, where customer PR network with be enhanced
ultimately.
 Not only focused on delivering the product, but FBA also deals with refunds and
returns. The third-party seller doesn’t need to break a sweat during all this process.

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 On-time delivery has always been a concern for Pakistani sellers for international
clients. With Amazon FBA, they don’t have to take tension as FBA promises swift
delivery without compromise.
 Amazon FBA also allows its sellers to access multichannel fulfilment solutions.
Through this, the seller can sell their products across multiple platforms.

CONCLUSION:
 Amazon has developed an unprecedented customer support only in the span of last 15
years with its unique business model of online business. This not only allows the
company to have a cutting edge advantages over the competitors but also makes it a
cost leader in its business. It overpasses all the supply chains to reach to the
consumers through it innovative e-commerce approach. This allows the company to
have a control over its distribution channel and so is able to cut down the prices of its
products. The company hires the distribution channels and warehouses in the areas
where the cost of dumping inventory is extremely low and forward it’s saving to the
consumers in the form of the competitive prices. But, Amazon needs to keep focusing
on the research and development of better and more innovative way of serving to the
customer, which will not only maintain its market leadership in the online business
but also allows it to be all time favourite to millions of its loyal customers around the
globe.
 concentric diversification. This strategy is based on leveraging technological
capabilities for business success and following a cost leadership strategy aimed at
offering the maximum value for its customers at the lowest price in addition to
wrapping its business around the customers wherein they find Amazon to be the go-to
portal for their online shopping needs.
 Indeed, this strategy has paid off well as can be seen from the fact that it is the
world’s largest online retailer and has consistently been the leader in the market
segments in which it operates. Having said that, it must also be noted that cost
leadership can follow the law of diminishing returns wherein firms following this
strategy find that they are unable to sustain growth or increase profitability once the
“low-hanging fruit” are plucked.
 Amazon’s strategy is driven by its sources of competitive advantage wherein it is
focus on technology, actualizing the benefits of economies of scale, and leveraging
the efficiencies from the synergies between its external drivers and internal resources

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have been the cornerstones of its business model. Further, Amazon uses Big Data
Analytics as a tool to map consumer behaviour. Indeed, Big Data has been embraced
to such an extent by the company that it is now in a position to market this as another
service offering.

EXTERNAL ANALYSIS

Discussions of external environments give Amazon.com with the information necessary

to improve its strategic intent and strategic goal, which influence policy formulation and
execution actions as external environment affects growth and profitability level of the
company.

Economic Segment

The people of developed countries have more facilities to purchase products using
internet while customers of developing countries can also be potential market for the
industry as number of internet users are increasing who would like to take the facilities of
advance technology, for instance, China, Bangladesh and India can be potential market
within very short period.

Political/ Legal Segment

The online retail industry is complex since it involves many factors those affects on the
profitability level of this industry, such as, data protection policy, taxation policy, entry
barriers, regulation of the foreign governments, war and terrorism, unfriendly political

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relation between the governments, unstable political situation in many countries, claims
from customers, shipping agents, brokers, privacy policy, and so on.

Socio-Cultural Segment

The social and cultural issues play an imperative role in the running of the industry; the
fact the society and cultural issues vary all over the world indicates that the sales of the
industry vary in different countries.

Whilst the sales remain highest in American and European context, the increasing
developments of progressive societies like China, India, Bangladesh, and Brazil means
rising sales in those areas. Conversely, sales in conservative and outmoded societies, like
a few Asian, African, and Arab world countries remain few.

Technological Segment

Technology plays vital role in this industry because the process of the business,
transaction system, order processing, supply chain management, development of
customer relationship and brand awareness, competitive position, ensure quick and
quality service, and all other important issues depend on technology.

Global Segment

The global market size is gradually increasing with rising access of Internet and IT
amenities; therefore, the prospect of the industry is high.

Marketing & sales

Amazon also maintains heavy focus on marketing and sales. If its marketing expenses
have risen fast in the recent years then it is because of the rising competition from various
players in the industry. Amazon uses several marketing channels for the marketing of its
brand and products. Its uses targeted online marketing channels, like its sponsored search,
Associates program, social and online advertising, television advertising, and other
initiatives to direct consumers to its websites and increase sales and retention. Increased
spending on online marketing channels as well as higher payroll and related expenses
have led to higher marketing expenditure for Amazon. In 2017, its expenditure in
marketing efforts was higher than 10 Billion dollars.

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CONCLUSION:

Amazon has developed an unprecedented customer support only in the span of last 15
years with its unique business model of online business. This not only allows the
company to have a cutting edge advantages over the competitors but also makes it a cost
leader in its business. It overpasses all the supply chains to reach to the consumers
through it innovative e-commerce approach. This allows the company to have a control
over its distribution channel and so is able to cut down the prices of its products. The
company hires the distribution channels and warehouses in the areas where the cost of
dumping inventory is extremely low and forward it’s saving to the consumers in the form
of the competitive prices. But, Amazon needs to keep focusing on the research and
development of better and more innovative way of serving to the customer, which will
not only maintains its market leadership in the online business but also allows it to be all
time favourite to millions of its loyal customers around the globe.

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