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Case: Amazon in Emerging Markets FACTS ● Incorporated in 1994, Amazon had evolved from a small online provider of books and other information-based products in 1997 in a global "customer-centric" company serving consumers, sellers and developers with operations in twenty-two countries ● On June 5, 2013, Amazon officially entered the Indian market with the launch of Amazon.in. ● In the Indian population cash payments were more dominant than card payments ● The e-commerce promise of the fast-growing Indian market had already attracted several players, national and international, to the scene retail electronics of India. Some of the largest in terms of revenue and market share include Flipkart, Snapdeal, and eBay. ● Having copied some of the model of Amazon business across the country, the founders of Flipkart had been able to capture 4.9% of the Indian e-commerce market very fragmented in 2013. Flipkart found rapid success by developing its own logistics network and by adopting the "cash on delivery" payment option in 2010 in order to adapt to cash payment habits focused on the Indian consumers. ● Main competitors: *Flipkart- developed its own logistics network and adopted the cash on delivery, fashion retailer *Snapdeal- Electronic coupons, I bought several stores in the market positioned as high fashion margin retailer to discover popular trends and lifestyle products. *E-bay- Products in auction as final price, investment in logistics, security deposit. It positioned itself as a foreign trade marketer of the sale among Indian sellers and buyers. ● Snapdeal has also expanded its reach through several acquisitions. In 2012, it acquired Esportbuy.com, an online retailer of sporting goods, and in 2013 Shopo.in, an online craft market, was purchased. In order to put at stake its position in the high retail margin space of Online fashion in May 2014 acquired Snapdeal Doozton.com, a site that helps users to discover popular fashion trends and products of Lifestyle ● Growing at an annual composite rate of almost 70%, China's e-commerce market was set to surpass the United States as the largest e-commerce market in the world.

● In the Indian population cash payments were more dominant than card payments ● Amazon implemented the "compliance by amazon" that allowed the sellers to store their products in the amazon distribution center and have amazon take care of the delivery for a fee ● In India amazon it was the first e-tailer to offer the shipment the next day. It also added PIN codes and reference fields to facilitate the location of addresses ● The "compliance by amazon" granted the responsibility of delivery to Amazon ● Amazon offered incentives to those who referred clients or bought Amazon products ● Amazon offered a commission to all online publishers who directed their viewers to Amazon.in ● Amazon replied the cash on delivery, which also allowed customers to pay for their merchandise at the time of delivery ● Amazon in China strived to replicate the customer experience. When a competitor lowered the price of Amazon (less than $ 1), Amazon issued a refund for the difference to the clients, who did not expect a refund, which generated positive publicity ● Amazon entered the Chinese market by buying joyo.com for $ 75 million, just when the GDP per capita had a growth of 10% per year and with a growing number of users on the internet

PROBLEMS ● Despite a growth of 14% in sales between 2012 and 2013, Amazon’s international business had seen a period of declining rate of growth since 2011. ● The Indian government still forbid foreign multi-brand retailers. As a result, Amazon could not replicate its US business of selling its own products. ● Amazon faced problems in its distribution channels, since in India its roads were in very poor condition and 70% of the population lived in rural areas which lacked roads and difficult to find. ● Two ex-Amazon employees, launched Flipkart in India. Having copied some of Amazon’s business model throughout the country.

● Amazon introduced next day delivery and just after that Flipkart announced that it would be offering “in a day guarantee” delivery. Son after, bothe companies began to offer same day delivery in a number of cities if ordered before a certain time. ● Amazon faced limitations on its operations and sales in China such as internet content and sales. ● Chinese law regulated and restricted Amazon's Internet content, as well as the sale of any product or service related to the media, and required that the site be operated by a Chinese-owned corporation. ● In Brazil there was a complicated and high system of taxes on consumption, besides labor laws and regulations were very expensive. 69% of the roads in Brazil were in poor condition ● Amazon in Brazil faced with webs of tax codes, labour law, logistic challenges and string competition established in Latin America. ● Amazon established its first office in Russia. However, russian laws, political uncertainty and por infrastructure would inhibit e-commerce growth in this market. ● In terms of transport infrastructure, many of the roads in India were in poor condition and too congested. Even in the best roads, such as between New Delhi in the north and Mumbai, on the west coast, driving took almost double the amount of time it took to drive the same distance in the US, according to Google Maps.

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