E-COMMERCE

GROUP MINI REPORT

UNBEATABLE AMAZON
ONLINE & OFFLINE
GROUP 20

Angelo Benetau - 82419632

Camille Segard - 82419635

Cho-Jen Yang - 82419614

Elvira – 82419625

FU Yucheng - 12418216

Helen - 82419620

Samuel Samudera Susjanto Harno - 82419626

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 GROUP MEMBERS & ROLES

GROUP MEMBERS ROLES & RESPONSIBILITIES

Firstly, we will start off with our group member, Angelo.

Angelo Benetau (82419632) When it comes to collecting and analyzing the data &
information regarding Amazon’s Omnipresence in The
World, especially in the Geographical & Market aspects,
Angelo is the one who held the roles and responsibilities
to do the research and analysis of the respective data.
Besides that, Angelo is also responsible in managing the
group work alongside with Samuel, especially in guiding
and suggesting about what to do with the presentation
which is really important.

Moving on to our second group member, in our group

Camille Segard (82419635) presentation & mini report, Camille is the one who’s roles
and responsibilities are mostly focused on creating &
designing the presentation slides while at the same time
she’s also tasked and responsible with selecting and
sorting the crucial highlighted data & information that
will be used. Other than that, she’s also responsible for
the editorial & formatting roles of the paper and content
in the group mini report which is really important so that
the report paper can have an appropriate presentation and
format so it will be easy & comfortable to read.

Cho-Jen Yang (a.k.a Roger) is the one who’s in charge

Cho-Jen Yang (82419614) and responsible for researching and analysing about Why
& How Amazon is unbeatable until now, especially for
both group presentation and mini report where as he did
some research to support the analysis why Amazon is
unbeatable while at the same time he also used the
already given data and analysis by other group members
in the previous sections of the paper to also support his
analysis regarding Why & How Amazon is Unbeatable
whether in both Online and Offline aspects.

When it comes to researching and analyzing data

Elvira (82419625) regarding Amazon business activities in B2B aspects &
activities for both group presentation and mini report,
Elvira is the one who’s in charge and held responsible of
doing it where as she found a lot of B2B data and also did
some B2B analysis while at the same time she also
worked alongside with Samuel to find some data
regarding Amazon Business Activities starting from B2B
to O2O activities, and Amazon SCM

FU Yucheng (a.k.a. Vita Fu) is the one who’s roles &

FU Yucheng (12418216) responsibilities are quite crucial because she’s the one

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 who’s responsible for presenting the content of the group
presentation regarding the Unbeatable Amazon alongside
with Samuel while at the same time she’s also responsible
for writing the conclusion & formatting the references
part in the group mini report.

When it comes to researching, analyzing and introducing

Helen (82419620) about Amazon in the group presentation and paper, Helen
is the one who’s roles & responsibilities is to research and
analyze about the Background and Business growth of
Amazon which is being used to introduce Amazon while
at the same time it also indirectly shows why Amazon is
unbeatable, especially by showing the business growth of
Amazon in past & recent years.

Last but not least, our group member Samuel S is the one
Samuel Samudera Susjanto who’s roles & responsibilities in both group presentation
Harno (82419626) and mini report are researching and analyzing data
regarding Amazon business activities starting from B2B
to O2O aspects and also the SCM of Amazon. Besides
that, he’s also the one who’s in charge of managing the
group work alongside with Angelo and in the group
presentation he’s also responsible for presenting the
content of the presentation about Unbeatable Amazon
alongside with Vita Fu. Lastly, alongside with Camile,
He’s also responsible in the final editing & checking of
the group mini report paper especially in terms of
formatting, content and references.

TABLE OF CONTENT

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i- Cover 1
ii- Group Members & Roles 2-3
iii- Table of Content 4
I- Introduction : Amazon’s background 5
II- Amazon Business Activities 6-13
2.1- Amazon Business to Business (B2B) 6
2.2- Amazon Business to Consumer (B2C) 7-8
2.3- Relationship Between Amazon B2B and B2C 9
2.4- Amazon Online to Offline (O2O) 9-11
2.5- Amazon Supply Chain 11-13
III- Amazon Omnipresence 14
3.1- Geographic Presence 14
3.2- Market Presence 14
IV- Why & How? 15
4.1- Huge number of Stock Keeping Unit 15
4.2- Get Buyer’s Trust & Attract more Sellers 15
4.3- Use Collected Data & Ensured Reviews to Convince Buyers 15
4.4- Provide Unique Different Services Than Other Platforms 15
4.5- Amazon Places Importance on Customers 16
V- Discussion 17
VI- Conclusion 18
VII- References 18-21

Content Word Count : 3,998 Words

I- INTRODUCTION : AMAZON BACKGROUND

The Birth of the Unbeatable Amazon started when it was founded by Jeff Bezos after
he left His Wall Street employment in 1994. It was firstly based in the garage of Bezos

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renthouse in Washington. It started as an online bookstore due to the large demand of
literature products offering at a low price per unit & after two months of starting up Amazon
sold to all 50 states and more than 40 countries with sales up to $20,000 / week. Amazon's
logo does has meaning and it’s a way to tell customers that they provide every product from
A to Z, as the curved arrow shaped like a smile points from A to Z.
Furthermore, In 22 January 2018, Amazon opened a store called Amazon Go that uses
cameras and sensors to detect items that customers grabs from the shelves and automatically
charges their account. For this customers are required to install the Amazon Go app and open
an account in order to enter. By doing this it eliminates the need of checkout queueing, which
makes the process more effective and time saving, but it was mainly for Amazon employees.
However, later in 2018 it opened 8 stores in Seattle, Chicago, San Francisco and New York
for both public and employees as well.
Moreover, Amazon’s first profit after the fourth quarter of 2001 was $1 Billion, with a
$5 billions revenue. The company’s revenue and net income has increased over the years till
the point where it has tripled from $3.03 billion (2017) to $10.07 billion (2018), which is the
biggest annual profit so far.

II- AMAZON BUSINESS ACTIVITIES

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2.1- AMAZON BUSINESS TO BUSINESS (B2B)
Amazon is an E-Commerce company moves in both B2C and B2B, especially back in
2012 where Amazon launched AmazonSupply for B2B but it doesn’t sell so in 2015 they
renamed and relaunched it again under the name of Amazon Business which is still running
& growing until now whereas Amazon offers some B2B services in it such as offering
standard & premium account, etc while Amazon also offers some B2B activities &
partnerships with some other Businesses to support their Supply Chain & B2C.
Amazon offers an account services for businesses which is called Amazon Business
that acts like a business account with subscription, and it comes in two types which were
Standard & Prime account. This service offers a lot of benefits for businesses, especially in
terms of competitiveness, price savings discounts as well as shipping and tax exemption for
some purchases although there’s some terms and conditions from Amazon that must be
followed and the minimum account fee requirement is $39.99/month. Larger business tends
to sign up for the Prime account since regular account has delivery limitation and by using
the Prime account, Amazon offers free shipping up to 100 million items .
There are 2 programs involved in Amazon Business which were Sellers Program and
Buyers Program. B2B buying process are quite complex although the ordering frequencies
and volume are relatively higher than B2C. Usually, businesses use Amazon Business for e-
procurement and cheaper purchases for their business activities, such as bulk purchases and it
applies vice versa for business that sells on Amazon where they can sell their products in
bulk. The seller decides for the prices but it also depends on the ordering quantity and related
quantity discounts, and Referral fee discounts are only available for certain categories.
Customers could also choose from multiple marketplaces on a single product from general
consumer goods to business-only products and Amazon Business also include reports and
analytics that make it easier to track spending.
Amazon Business gives administrators the ability to add and manage business account
uses and features, such as payment methods, shipping addresses, workflows approval, and
reporting options depending on business needs. With the helpful tools from Amazon
Business, all business sizes, from small to large enterprises could engage professional
customers in supply chain relationships and also give opportunities to the seller by displaying
GST-exclusive prices to B2B customers and provide auto-generated GST invoices to enable
businesses to claim Input Tax credit and Tax exemptions that they could get.

2.2- AMAZON BUSINESS TO CONSUMER (B2C)

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 In B2C context, Amazon is widely recognized as arguably the best E-Commerce
company that mostly moves in with a lot of B2C activities and customers until now. Amazon
offers a wide range of categories & varieties of products in a complete manner from A to Z
which makes Amazon lives up onto its name. Since the founding of Amazon, they started
their journey as a B2C company that firstly moves in selling books until they expanded their
product range from A to Z and nevertheless Amazon managed to gain a lot of good reputation
from their customers during their growth because of its convenient usage and its complete
offers of products which are superior than any other E-Commerce since the beginning which
makes it seems unbeatable, especially in B2C.
In Amazon B2C activities, Businesses used Amazon Marketplace to sell their
products to the customers that usually look for the offered product before doing E-
Purchasing. Businesses can sell their products directly to the customers, although most of the
time it will go to the Amazon warehouse first in compliance to Amazon SCM. The B2C
activities of Amazon is also divided into offline and online which are interrelated although
the online seems more dominating than the offline for now because the online one is the basis
of Amazon since Day 1 and the offline one is quite relevantly new. In order to support their
B2C activities, Amazon collect customer email addresses for marketing lists, allowing the
seller to use the power of email marketing to increase customer engagement and interests. In
B2C Context, Amazon offers special deals to customers, such as Regular Discounts, Cyber
Monday, Black Friday, etc that’s really attractive and considered as worth it for some
customers yet it’s still profitable for Amazon & sellers because it also increase the sales.

Amazon also offers some B2C delivery option, especially the Free Delivery alongside
with the Prime & Paid one with each own features although the principle is that the fee &
duration is based on the account membership and distance.

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 Besides offering products to customers, Amazon also offers some related services
such as Amazon Prime, Kindle, etc that comes with their respective features and benefits
such as discounts, premium content, faster & cheaper shipping, etc that promises a lot of
good returns to the customers which are really useful for customers. In terms of Convenience
& accessibility, Amazon is really convenient to access since it can be easily accessed through
a lot of platform, starting from computer to mobile platform, and through the interweb or
Amazon applications. Amazon also offers a wide range of products that can be easily
searched by using their search engine that comes with personalization & customization
features and after customers are done shopping, they can easily check out with their preferred
and settled address & payment options which is really convenient.

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2.3- RELATIONSHIP BETWEEN AMAZON B2B & B2C
Although Amazon B2B & B2C activities and platforms are separated from each other,
there’s still some interrelation between them. The B2B are quite more diverse than the B2C
where as it can be independent from the B2C yet at the same time it’s still also interrelated.
The likes of Amazon have jumped in and filled a need, transferring the experience of B2C to
B2B where as it removes the complexity and creating choice for the buyer while providing
the opportunity to sell across new geographical borders. In terms of B2B relations with third
party sellers, Amazon takes fees ranging from 8%-20% of their sales because Third Party
Sellers is a high-margin business based on Amazon’s existing B2C infrastructure. B2B
Activities that Amazon done with other Businesses (Amazon Partners) is usually being aimed
and used for B2C customers in the B2C online marketplace.
However, some of the products that amazon procured through & from businesses are
also going to be sold from B2C online marketplace to the offline marketplace which
translates into Online-to-offline (O2O) activities which is still quite new yet could also be the
future of E-Commerce. When Visualized, The Relationship of B2B & B2C in Amazon can be
illustrated as shown :

2.4- AMAZON ONLINE TO OFFLINE (O2O)

Amazon decided to open some retail stores which were Amazon Bookstore (2015),
Amazon Go & 4-star (2018) and Amazon Grocery ( 2020) with the basis of O2O business
whereas the products on the retail stores are based on the online stores which were moved
onto the offline stores so that customers can easily order and then access the product offline.
Online-to-offline (O2O) commerce is a business strategy that draws potential customers from
online channels to make purchases in the physical stores. The main goal of O2O is moving
things from the internet to the physical world in order to increase direct accessibility and
saves time. Amazon opened some offline retail stores which have been mentioned before that
sells products from the online marketplace in a revolutionary & practically innovative way
whereas the revolution and innovation in those stores are such as camera & sensors usage,
advanced automation system, account transaction register, independent fast check out, online
to offline linkage & access, 4-stars products only, etc and it also offers a wide range of
products starting from daily necessities and others.

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 However, we are probably still wondering why Amazon decided to make offline
stores with an O2O basis despite the fact that they look like an unbeatable giant online and
offline?. Apparently, According to Jeff Bezos, Brick & Mortar and Retail Storefronts is still a
thing and they still retain their respective advantages, which makes Amazon decided to open
offline stores because he said that Amazon is still “small” compared to them and most of the
present sales were mostly 90% being done in retail stores because of the products direct
accessibility. Although most people sees that Amazon “killed” Brick & Mortar yet at the
same time Amazon decided to dive in by making some Distinctive Retail O2O Stores with
some innovation within it that’s way more convenient than normal retail stores which makes
offline stores such as Amazon Go being seen as the future of retail shop. Amazon decided to
do it because they wanted to show to those companies “How to do It” through the existence
of their stores so that they could evolve, adapt and survive in order to compete with Amazon
and to create a mutual & healthy business environment while at the same time ensuring the
practice & application of O2O Commerce alongside with its purposes and benefits.

Amazon decided to open O2O Retail stores because they want to Improve & Balance
its Business alongside with its model and ecosystems which is really crucial for their future.
O2O is becoming more crucial and important, especially for Amazon in order to adapt and
improve because moving things from online to offline world takes time and it means that
there will be less direct accessibility for customers while at the same time Retail stores still
retain their advantages by offering products direct accessibility to the customers. By utilising
the O2O concept, Amazon could improve and maximize their Business Potential which
Amazon has already been doing until now through opening their innovative retail stores
which really utilised the O2O concept and also inline with its purposes such as increasing
convenience & direct accessibility, time & cost saving and ensuring the flow of goods keep
going whereas Amazon managed to achieve all of that by innovating and differentiating their
stores from normal retail stores by using the previously mentioned innovations which make
Amazon become more Unbeatable, Online and Offline. Besides innovative retail stores,

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Amazon also opened a pickup facilities (lockers) where customers can pick up packages from
their online orders which also supported the concept and purpose of O2O with a goal to
increase customers convenience.

We found a case study from Vox where Amazon suffered a lot of late deliveries
because of High Demand & Bad Weather and to put it simply, we feel that this is the reason
why Amazon still needs to expand their O2O business because moving online products to
offline world really takes time and there are some factors that could disrupt the process. If
Amazon decided to expand their O2O Business alongside with the offered products, probably
this could be prevented in the future.

2.5- AMAZON SUPPLY CHAIN

In order to support all of their business activities, a good supply chain system is
vitally important to ensure that the flow of goods keep going and by doing so, Amazon has
settled a uniquely sustainable supply chain system to support all of its activities which
contributes to the convenience of Amazon and also making it seems unbeatable. So far,
Amazon utilised some advanced systems and processes in their advanced practices such as
Warehousing, Robots, automations, SKU systems, etc. Some Amazon partners in the supply
chain logistics services are UPS, FedEx, and other logistics services which can differ in each
country (e.g. in Japan : YamatoKuroneko, etc), especially for the B2C although Amazon also
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owned some logistics services such as Amazon Maritime while at the same time they are also
opening an opportunity called “Amazon Delivery Service Partner” where as people can apply
as a part of Amazon’s logistics services that offers an annual profit of $75,000-$300,000
(CNBC, 2018) and the reason Amazon created this program is to support their Advanced
SCM, especially in dealing with “last-mile” delivery problems.

In their SCM Practices, Amazon used Push-Pull strategy which is a big part of their
SCM and inventory where they utilised the use of warehouse and as for the push strategy,
Amazon stored the products they will sell in the Warehouses based on the demand forecast
while at the same time they also uses pull strategy when selling products in order to minimize
the risk of unsold inventory and also to ensure the flow of goods keep going between all.
Amazon also uses some automated systems in their supply chain & warehouses in order to
save time and increase the efficiency & accuracy of their related activities whereas Amazon
used a robot and automated machines to do the warehouse activities in an accurate and
efficient manner, especially in selecting and processing the designated products. Besides that,
back in 2016 until now Amazon is also planning on using drones and autonomous machines
for their supply chain activities, especially for the B2C packages delivery from Warehouse to
the Customers and back in 2019, Amazon finally implemented the Drone delivery services
called Amazon Prime Air which is mostly still only available for Amazon Prime members
and still has some limitations such as weight, distance & weather but it will still be improved
and Amazon will also consider to expand the services to non-prime members.

Generally, Amazon SCM is based on 4 main points which were Warehousing,

Delivery, Technology and Manufacturing whereas it usually starts from Warehousing of
goods then it moves onto the inbound and outbound delivery logistics which were supported
by Technology that has been previously mentioned which helps in managing the flow of
goods in SCM and lastly manufacturing of goods to be supplied by business comes to play.
Below are the visualization of Amazon’s SCM Process & System :

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 One of Amazon’s publicly implemented SCM systems is the Amazon FBA which is
widely used in the Marketplace and below is the visualization :

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III- AMAZON OMNIPRESENCE
3.1- GEOGRAPHIC PRESENCE
In 2017, the company has over 540,000 employees worldwide. What started as a US
company with single sites in 1995 now has specific sites in different countries across the
world where as we can mention the sites in Germany & UK (1998) as the first international
presence signs then followed by Japan (2000) and China (2004) while a lot of European
countries kept on following. Amazon is currently the biggest company of the sort and thanks
to its convenience, is able to sell worldwide almost any product from any producers to
reinforce that global feeling.
3.2- MARKET PRESENCE
Besides being present all over the world, Amazon is also present in a lot of different
lucrative markets. The most important one is obviously the online Platforms but Amazon also
keeps on expanding in a lot of other domains. For example, Audible which was bought by
amazon in 2008 is one of the biggest audiobook companies and currently leading on its
market and then Twitch, the leading live streaming platform on the internet which was
bought by Amazon in 2014 making it join the growing network. The real reason Amazon
seems so omnipresent doesn’t only have to do with their presence on online service. The
creation of their original & acquired physical products participate to what seems to be a grasp
on every market they can where we can list products such as Alexa (Virtual Assistant),
Kindle (E-reader), Echo (Smart Speaker) and The Fire TV (Digital media player) whereas
those products are connected one way or another. Amazon offers a premium account called
“Amazon Prime” which gives certain advantage on numerous different platforms, pushing the
consumer toward a more diverse but still centrally owned variety of products. On a more
discrete part, certain numbers of Amazon subsidiaries also exist for some direct practical uses
such as the ownership of Amazon Maritime & Beijing Century Joyo Courier service are here
to give Amazon more independence & flexibility for their delivery services.

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IV- WHY AND HOW?
Besides the previously mentioned things about why Amazon is Unbeatable Online
and Offline, below are also the reasons Why & How Amazon is still unbeatable.
4.1- HUGE NUMBER OF STOCK KEEPING UNIT
Amazon offers a huge number of SKU & unique product identification numbers,
indicating that they have broader selection of products than anybody else. Amazon is just like
an encyclopedia in the shopping world, you can get anything you need from them and this
selection makes shopping easier for customers. By having such a variety of products, they
have been able to draw in customers from a wide range of niches and retain them because of
the items that they sell. Moreover, when it comes to customer lifetime value, by offering such
a variety of products, a customer is more likely to continue buying in the future. This
convenience is appealing, and it draws in a vast crowd of consumers who are merely looking
for the easiest way to get their products.
4.2- GET BUYER’S TRUST & ATTRACT MORE SELLERS
For customers, they could choose the products with “Buy Box” which shows sellers
with high rating, quick shipment, and low order defect rate. For sellers, everyone wants to get
featured in the buy box because 82% of trades are done through Buy Box and to get it, the
seller must have Professional Seller account and use FBA. FBA is a service offered by
Amazon where seller only need to focus on selling strategy because the logistics will be taken
care of by Amazon. Therefore, we could see Amazon keep offering charged services to earn
more profit, but they also could attract more sellers to join because Amazon’s service did
help their sales volume. When Amazon have grown into a specific scale, it would only grow
bigger because it helps new sellers gain trust and new buyers find their wanted products.
4.3- USE COLLECTED DATA & ENSURED REVIEWS TO CONVINCE BUYERS
We could see many customers’ reviews in a product and it helps customers to identify
a product’s reputation. With big data analysis, Amazon will recommend customers’ products
which they might be interested in.

4.4- PROVIDE UNIQUE DIFFERENT SERVICES THAN OTHER PLATFORMS

Amazon Prime, Professional Seller, FBA, Amazon Pay, Amazon Go, etc are unique
different services offered by Amazon that usually comes in monthly basis charge and the
benefits from those services are such as free two-day shipping, prime video, etc. From this
service, we could see that Amazon keeps offering services at full stretch and They didn’t
limit customers in “shopping”.

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4.5- AMAZON PLACES IMPORTANCE ON CUSTOMERS
From the chart below, we could see Amazon’s 11 customer satisfaction standards to
evaluate a product which were usually used by sellers to see which part they must improve.

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V- DISCUSSION
Based on our analysis, we’ve come up with some relevant questions below regarding
why Amazon is Unbeatable online and offline alongside with its potentials that still can be
utilised to make it more unbeatable which we would like to discuss below.
“Since Amazon mostly moves on B2B & B2C aspects, is it still possible to add C2C
aspects to Amazon in the future?”
The answer is Yes, it’s still possible for Amazon to add C2C aspects to Amazon
because right now Amazon is quite community based, especially in B2C where as most of the
products reviews were based on the community and some of the businesses / sellers there are
also Amazon’s regular customers like us. Besides that, we also found some second hand
products that were being sold in Amazon and it usually came from the customers although
the pricing of the products can be higher or lower than the market price which is quite eBay-
like but this indicates that it’s still possible for Amazon to add C2C aspects & activities
alongside with the B2C.
“Is there any other way to improve Amazon’s convenience? Especially the one that can
be implemented worldwide?”
There’s still some ways to improve the convenience although it’s gonna be quite hard
because Amazon is already really convenient. In order to improve the convenience that can
be implemented worldwide, some integration of market & system alongside with creating
more warehouses, especially the centralised one needs to be done. However, in offline
context Amazon could increase the convenience by increasing the O2O stores accessibility
through expanding and creating more stores worldwide but it must also be supported by the
previously mentioned worldwide integrated support system.
“Suppose that Amazon expanded its O2O stores more and more, it is still possible for
other E-Commerce Businesses to compete with amazon by also opening up Offline retail
stores with O2O basis?”
The answer is Yes although it’s gonna be really tough for them to compete because
Amazon has already taken the lead since the beginning in a lot of aspects and most
importantly Amazon is being seen as the pioneer in O2O because of their “newness &
originality” concept. If those other companies decided to follow & compete with Amazon in
O2O, they probably need to do a lot of differentiation in order to avoid copycat images so
they could also kinda level the playing field. One of the examples is where JD (Chinese E-
Commerce Company) opened JD-X in China & Indonesia with similiar concept to Amazon
Go and the responses are mixed although they managed to quite dominating in those regions.
However, in terms of O2O in B2B context, it’s still possible for companies such as Alibaba to
compete & beat Amazon by opening O2O stores for B2B, although it’s still gonna be quite
hard because they still need to set up the system and Amazon could easily come up &
compete using a better & innovative system.

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VI- CONCLUSION
Overall, Amazon has several reasons why they are unbeatable. Since the founding of
Amazon, it has reached an unbelievable revenue point alongside with steadily increasing net
income. Amazon also seems to be really convenient & innovative in B2C, B2B & O2O and
it’s also omnipresent in both geographical and market terms, expanding from online
platforms like Audible to offline platforms like Kindle due to 5 reasons based on our
discussion. The 5 reasons are numerous SKU, User’s Trust, Big Data, Unique services, and
Customer’s satisfaction standards based on goods, services and market aspects. From our
discussion, Amazon still has space for improvements and could retain its position in the
market if they continued adding more convenient online and offline shopping mode &
experience.

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