GBS Group 2 – Amazon goes global 2020

1. Why did Amazon initially consider international expansion? Is international expansion

a key success factor in Amazon's industry?
- Mitigating risk and reducing overdependence on the home market or any single
International market
- Intense competition and saturation of home markets (Eg: from Walmart)
- Lucrative market opportunities with 20+% CAGR in Asia and middle east
- Capitalising on the opportunities created by increase in internet adoption

Yes, international expansion is a key success factor in Amazon's industry

- Negligible product differentiation in retailing, hence ‘Market development’ strategy

should be followed.
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4. Why did Amazon fail in China?
a. Cultural, Administrative and economic distance – customers not willing to pay for e-
books, sparse use of card payments
b. Not launching Kindle in China leading to dominance of local brands and low cost
readers
c. Regulatory barriers and complications in cloud services
d. Failed e-books business in China: pirated e-books
e. Alibaba(lower prices : made use of local delivery companies) and JD did better
marketing(shopping festivals, discount campaign, nation-wide red envelope
promotions), faster delivery by JD(biggest logistic infrastructure) and Tmall, better
services
f. Amazon had limited localization of content and lacked popular purchase features in
China like group buying

Q5. Was there any pattern across Amazon’s international entries?

Ans:

- Acquisition of online book retailer (UK, Germany, France, China)

- Post settlement, diversification into other products and services
- Country specific websites
- Testing the market through exports before entry (Japan)
- Local collaborations and tie ups (China, Japan, Mexico)