INTERNATIONAL BUSINESS

ASSIGNMENT 2: AMAZON IN EMERGING MARKETS

TEAM: IB EXPERT
NUMBE STUDENT LEVEL OF
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1 NGUYEN MAU TRUNG TRONG K224081098 100%
2 NGUYEN QUANG HIEP K224081070 100%
3 HO MINH QUYEN K224081085 100%
4 LE THI CHAU THUY K224081090 100%
5 TRAN THI TU MY K224081078 100%

1. What is the strategic positioning of Amazon?

Strategic Position Analysis of Amazon in the Indian Market:
Amazon entered the Indian market with a clear understanding of the regulatory
environment, including FDI restrictions, import taxes, and adjusting its business model to
operate optimally. In a highly competitive market like India, Amazon has endeavored to
create differentiation, including:
For product distribution: Amazon recognized early on the challenges of
distribution in India, thus investing significantly in building fulfillment centers and a
logistics network to ensure timely delivery, including offering next-day delivery services.
By providing the "Fulfillment by Amazon" program, the company offered sellers a
convenient solution for storage and delivery, addressing a major pain point for e-
commerce businesses in India. After Amazon introduced next-day delivery, Flipkart
announced they would provide "Guaranteed Same Day" delivery. Subsequently, both
companies began offering same-day delivery services in some cities if orders were placed
within a certain timeframe.
Additionally, Amazon introduced various customer-friendly policies: To
compensate for difficulties in address positioning and ensuring timely delivery for sellers,
Agarwal added PIN codes (similar to ZIP codes in the US) and milestone fields on the
delivery information page, reaching 21,000 PIN codes compared to 12,000 of other
retailers, offering incentives for sellers when signing a two-year membership contract
with the first year free, providing a trial service called "Mainstreaming Sellers/SMEs" to
guide them on online transactions, product listing, and accepting online payments.
With the increasing number of Internet users in India, to attract buyers, Piacentini
and Agarwal offered many incentives for customer referrals or purchases from
Amazon.in. In the early stages of operation in India, Amazon offered free shipping
services, attracting buyers by replicating the cash-on-delivery payment option provided in
China. In addition to online payment options such as credit cards, debit cards, and bank
transfers, cash-on-delivery payment methods allowed Amazon customers to pay for their
goods at the time of delivery.
 To support sellers, Amazon provided benefits such as free membership in the first
year and support and training on platform usage. Initiatives like "Mainstreaming
Sellers/SMEs" aimed to attract small retailers with little or no experience in online
selling, thereby expanding the seller base on Amazon.in.
Strategic Position Analysis of Amazon in the Chinese Market:
Amazon's strategic positioning in China has been a complex and challenging endeavor.
Despite being the largest Internet-based retailer in the world, Amazon faced difficulties in
establishing a strong presence in the Chinese market.
Initial Entry and Challenges: Amazon entered the Chinese market in 2004 by
acquiring Joyo, the largest online book seller in China at the time. However, Amazon
struggled to replicate its success in the United States and faced strong competition from
local players like Alibaba and JD.com.
Strategic Missteps: Amazon made strategic missteps in China by attempting to fit its
working business model from the United States into the Chinese market. However, the
Chinese consumer market demanded something different, and Amazon failed to adapt
effectively.
Competition with Local Giants: Alibaba and JD.com, two prominent Chinese e-
commerce giants, employed strong local strategies that posed significant challenges to
Amazon's market share in China. These local players had well-established platforms and
better understanding of Chinese consumer preferences.
Market Share Decline: Despite initially making inroads, Amazon's market share in
China declined over the years. In 2008, Amazon China held 15.4% of the country's
eCommerce market share, but by 2015, it had dwindled to just 1.1%. During this period,
T-Mall dominated with a 58.6% share, followed by Jingdong at 22.8%.
Shift in Strategy: In 2019, Amazon made the decision to shut down its domestic e-
commerce marketplace business in China. Instead, the company focused on "cross-
border" selling to Chinese consumers, targeting opportunities in the Asia/Pacific region
while leaving the Chinese market to local leaders Alibaba and JD.com.
Lessons Learned: Amazon's experience in China served as a valuable lesson in the
complexities of engaging a foreign market with well-established local players. The
company redirected its energies and invested significantly in expansion efforts in India, a
market it deemed more conducive to long-term success

Strategic Position Analysis of Amazon in the Brazilian Market:

Amazon applied a different strategy in Brazil, focusing on enhancing customer
experience.
Amazon focused on the e-book market by introducing only the Kindle Store
instead of the large e-commerce market because by 2013, over half of Brazil's population
used the Internet and most were interested in reading books. Amazon officially signed
contracts with over 30 book publishers, increasing the number of titles in the national
language of Brazil, introducing e-readers.
 When Amazon penetrated the Brazilian market, it faced a series of challenges such
as the tax identification number system, labor laws, backend challenges, and strong
competition from longstanding e-commerce companies. This includes complex tax
systems (In 2014, Brazil ranked 116th in the World Bank's "Ease of Doing Business"
ranking, ranked 159th out of 189 countries in terms of tax availability.), expensive labor
costs (employers must pay for food, transportation, health insurance, 30 days of annual
leave, and mandatory bonuses for their employees.), and especially underdeveloped
transportation infrastructure (69% of roads in Brazil are still poor, narrow, and scattered -
"The World Economic Forum ranks Brazil 104th out of 142 countries measured in
overall infrastructure quality.") Not only that, with high import taxes making the price of
e-books twice as high as in the United States, making it difficult to compete with
domestic e-commerce companies.
Amazon adjusted its strategy to attract customers. Due to high import prices,
Amazon collaborated with 30 domestic publishers to print books, allowing the Kindle
installment payment option for up to 12 months, as Brazilian consumers often use
payment plans for expensive products and provide free delivery for their Kindle products.

2. What international business strategy does Amazon employ in emerging markets

(India, China, and Brazil)? Explain?
Amazon's strategy in emerging markets like India, China, and Brazil shows both
adaptation and core principles:
Adapting to Local Needs:
Mobile-First Approach: Unlike developed markets where desktops reign supreme,
Amazon prioritizes mobile apps for a more internet-savvy, smartphone-using population.
Logistics and Infrastructure: Building a robust delivery network is crucial. Amazon
invests heavily in local warehousing and fulfillment centers to ensure fast and reliable
deliveries, even in areas with complex infrastructure.
Seller Enablement: Programs like Amazon Tatkal in India help small businesses get
online quickly, addressing their concerns and easing the transition to e-commerce.
Core Customer-Centric Principles:
Seamless Online Experience: A user-friendly website and app with local languages and
payment options are essential.
Competitive Prices: Amazon leverages its global scale to offer competitive pricing and
deals, attracting budget-conscious consumers.
Wide Selection: A vast product catalog catering to a variety of needs, along with local
favorites, is a key element.
Learning from Experience: China Example: Unlike its approach in the US, Amazon in
China initially struggled by directly controlling inventory and logistics. They've since
adapted to a more marketplace-focused model.
Strategic Partnerships and Acquisitions: Partnering with local players and acquiring
established businesses gives Amazon a foothold in the market and local expertise.
By combining these elements, Amazon tailors its strategy to each market's unique
characteristics while staying true to its core principles of customer focus and wide
selection. This adaptability has been key to their success in emerging markets.