(4) Location

As part of your analysis in part (3), make sure to suggest one or more particular
cities or regions that will play a role in your proposed strategy. Describe the
advantages of the proposed locations in terms of operations and distribution
among others.

Amazon is the world's largest Internet-based retailer in terms of gross sales and
market capitalization. It was run by Jeff Bezos and was founded on July 5, 1994. Today,
it offers a wide variety of services that present great challenges to well-established and
newcomer competitors in similar industries such as digital streaming and artificial
intelligence. However, a company like Amazon needs to expand the market by entering
into the global market to get potential customers, maximize profits and find new
opportunities that have the potential to turn into new ideas that benefit the company in
the future. The Southeast Asian countries (Asia region) (Sub region) market is seen as
a huge potential location to expand further for the Amazon company in the future.

According to Luis Sanchez (2020), Southeast Asia's e-commerce market is

currently worth $100 billion and is expected to expand to $300 billion by 2025.
Southeast Asia is made up of 11 nations, six of which are economically dominant:
Indonesia, Thailand, Malaysia, Singapore, the Philippines, and Vietnam. Southeast Asia
is an interesting approach for ecommerce, with a total population of 655 million, a young
demographic, and online retail sales expected to rise by 44.4 percent per year. Based
on the research, it proves that by opening more markets around the Southeast Asia
countries is a new opportunity for Amazon to expand the market in the Asia Region
which are mostly developing countries. Southeast Asia is currently a very attractive
market for multinational e-commerce companies as well as smaller local players. At a
focal point in terms of Internet and smartphone penetration, Southeast Asia's population
is rapidly changing its habits to adapt to new possibilities for buying goods and services
digitally. Currently, Amazon is only based in Singapore. However, it is also given great
challenges through competitors such as Lazada and Shoppee in the e-commerce
market.
 Furthermore, Amazon needs to see a high trend of online buying in the
Southeast Asia countries during the outbreak of the Covid-19 pandemic. During the
coronavirus pandemic, Asia's B2C E-Commerce market grew significantly and was
projected to maintain its lead over other world regions. Furthermore, as a result of the
change in customer buying behavior toward online purchases, multiple E-Commerce
sites have produced significant revenue since the start of the Covid-19 pandemic. Most
shoppers in Southeast Asia choose to buy various types of goods online rather than
physically to prevent Covid-19 infection to themselves and their families. So, it will give
an advantage to Amazon to strengthen its market in the Southeast Asian countries by
adding several more companies in the host country. However, it requires strategies
such as localization that is by following the needs and requirements of segmentation,
adding functionality to facilitate users in developing and underdeveloped countries.

Next, In Southeast Asia countries, the country of Singapore also provides a huge
advantage in operation for Amazon. First, Singapore has a tax regime that is appealing.
Singapore's tax structure is thought to be "easy and investor-friendly." The top corporate
tax rate on net income is 17%. Capital gains and dividend profits are taxed at 0%. On
post-tax dividends paid from Singapore, there is no withholding tax. Equally significant,
all foreign-sourced income is tax-free if it was earned in a country with a headline tax
rate of at least 15%. Singapore's regulatory structure provides a level playing field for
overseas investors, with no limits on foreign ownership and no exchange controls.
Then, Singapore is a strategic place with excellent access. Singapore has a distinct
geographical advantage. The country is strategically situated at a crossroads of the
world's major trading and shipping routes, including the major sea route connecting
India and China. As a result, most Southeast Asian countries are just a short flight
away. In addition, Singapore’s extensive network of double tax treaties, strategic
position at the crossroads of all emerging markets, economic and political stability,
renowned legal system, extensive connectivity and talent capital, creative business
climate, and enormous opportunities for business growth in the Southeast Asian
countries. Based on the advantages that Singapore has, it will be profitable and
facilitate Amazon's operations.
 In Southeast Asian countries, such as Indonesia, it can help Amazon get skilled
and unskilled workers at low wages. This is because Indonesia is Southeast Asia's
largest and most populous nation and limited employment. Average gross salary in
Indonesia is USD 218.83. With low wages and a large population, it could help Amazon
to maximize the company’s productivity for mass production. In addition, Amazon can
also hire local skilled workers who are highly skilled and proficient in communicating in
English with lower wages rather than other countries. It is also followed by developing
countries such as the Philippines and Myanmar. Despite recent salary increases,
minimum wages in remain considerably lower than in most developed countries.
Businesses should be aware that minimum wages differ by country and are subject to
both national and regional regulatory adjustments. Factor-driven economies are ideally
suited to provide low-cost labour. In order Amazon find land for operations in Southeast
Asia is also easier as Indonesia whose mainland area is 1,919,440 km². it gives
Amazon an advantage to build an operating site in Indonesia by building a company in
the host country. It will make it easier for Amazon to build a larger warehouse and store
large quantities of inventory in host countries. It provides an opportunity for local and
foreign products to be stored in the warehouse and sold widely in large quantities. In
addition to the company's operations, Southeast Asian countries are rich in high-quality
and cheap raw materials and resources. So, it will help Amazon in producing high
quality products by effectively reducing manufacturing costs.

In addition, geographically, these Southeast Asian countries are nearby so it will

facilitate delivery by taking a short period of time. geographically, these Southeast
Asian countries are nearby so it will facilitate delivery by taking a short period of time.
For example, a Singapore-made product stored at the Amazon Warehouse in that
country, its shipment to Malaysia is fast as both are close neighbours. Goods from
Europe, U.S. and other foreign countries can be stored in every Amazon warehouse
throughout Southeast Asia and it will generate supplier revenue to compete in the
Southeast Asian market with the competitive advantages it has in the countries. In
addition, in these countries are available various transportation facilities such as land,
sea and air transportation. So, it will make it easier for Amazon customers in the Asia
Region to buy in the Amazon online marketplace.

Finally, Amazon needs to build more operating centres, warehouses, and

companies in host countries in the Asia region and Southeast Asian Countries (Asia
Subregion) as it is seen as the latest opportunity to discover new prospects and
markets. Here, we can see the various opportunities and advantages that Amazon will
have such as high online purchase rates in Asia since the Covid-19 Pandemic, more
flexible tax in Singapore, the area of operation sites and cheap warehouses available in
the country and employees with low wages in Indonesia. The advantage will cut
company costs (etc. labour cost), tax incentives and resources/raw materials that are
cheaper for Amazon. In addition, it helps Amazon to focus on research and
development (R&D) to produce a range of products that are beneficial, high quality and
cost efficient.
Conclusion

Amazon has expanded rapidly since its humble beginnings as an E-Bookstore.

Amazon's growth was undoubtedly aided by the digital revolution. However, the
company has found ways to remain creative and relevant; for example, Amazon has
used their internet platform to help shoppers and third-party sellers purchase and sell
products from the comfort of their own homes. The company's mission is to provide
same-day delivery, so that purchasing anything from Amazon has limited
disadvantages.

With its unique online business model, Amazon has established unparalleled
customer support in just the last 15 years. This not only provides the organization with a
competitive advantage, but also positions it as a cost leader in its industry. Via its
revolutionary e-commerce strategy, it bypasses all supply chains to reach customers.
This gives the company leverage over its sales chain, allowing it to lower the prices of
its goods. The business hires distribution networks and warehouses in places where the
cost of dumping inventory is extremely low, and it passes the savings on to customers
in the form of favourable rates. However, Amazon must continue to concentrate on the
research and creation of new and more creative ways of servicing customers, which will
not only enable it to retain its market share in the online industry but also allow it to be
an all-time favourite to millions of its loyal customers worldwide.

https://www.fool.com/investing/2020/01/28/these-2-companies-dominate-e-commerce-
in-southeast.aspx