Amazon Building Global Delivery Business to Take on Alibaba
bloomberg.com
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Those factories should be able to sell directly to the consumer via the Amazon marketplace, but there's a lot of hurdles for them. And they're certainly not equipped to run their own Shopify store.
If Amazon can reduce this friction (and I think they can) I expect the prices of a lot of commodity types of goods (like salad bowls or bike pumps) to drop significantly.
Just the tiniest bit of branding/marketing often sets someone miles apart from another otherwise equal local competitor.
Any examples? Just curious...
http://webdesign.tutsplus.com/articles/big-in-japan-web-desi...
https://randomwire.com/why-japanese-web-design-is-so-differe...
http://blog.teamtreehouse.com/why-is-chinese-web-design-so-b...
Another good example is the real-estate rental market. Many places lack furnishing and lose lots of business over similar competitors, and I mean the types of basics a months rent would cover. I was never able to figure out if this was due to lack of liquid funds (even though it would pay for itself fast) or something cultural.
Not saying I disagree with you I guess, it's also about westerners finding alibaba a bit too exotic (and dangerous), but once you get used to the asian style shopping, it's fine.
I've spent 15 years buying stuff off amazon.com (coming from California), and have recently moved to Singapore. The closest version of Amazon (with *insanely good local shipping - sometimes same day by bike courier) is http://www.qoo10.sg. I've been fully satisfied with prices, and delivery on everything there - but, it's still a bit of a culture shock for your average western shopper.
We'll see if I still feel the same way a year from now - but (even ignoring the discovery issue) I can imagine how having Amazon provide an interface for my purchases would have made this way more seamless.
And if you ship larger amounts you have to register the export with the customs office, which is another complicated process, filling endless forms in some mandatory Java applet system.
Amazon getting rid of all of this for a reasonable price would be very welcome.
But yeah, shipping in EU is much easier due to so many things – maybe this is a thing that TTIP should focus on, instead of IP law everywhere.
And no, I think Zalando can afford and handle that stuff just fine considering their size. We're a small manufacturer, very different from a retailer like Zalando.
The idea of mandated timelines for shipping, returns/refunds on a customer whim, timely communication with buyers, accurate product pictures + descriptions, accurate inventory levels, etc, will be a shock. I predict lots of interesting new posts in the Amazon seller's forum.
It's because of risk.
The full chain of manufacturing, exporting, warehousing, distributing, marketing, selling is a lot of work. Marketing being the last more risky and unprofitable part of the process.
Private labeling products to sell on Amazon and have Amazon handle fulfillment is one of those handful of get rich schemes peddled around often.
It's a good thing if you can get it going but finding the right niche, outcompeting other people doing the same thing, handling the support, and still getting a cut out of it is hard work.
Instead owning a factory, maximizing output, buying more land, building more factories, and letting others worry about making risky profits is a better business proposition.
That isn't racist at all. At no point has GP hinted at an inherent Chinese inability to do it.
$1 trillion ecomm market.
> If the logistics business takes hold, financial services could follow, with Amazon giving loans to merchants, processing international payments and consulting its network of sellers on customs and tax matters.
Today, Amazon FBA Merchants get zero help for Sales Tax, as Amazon pushes all liability onto the individual merchants. Why would this be different for cross-border taxes?
I hope that with this move they will also expand their shipping policy. I've used Amazon while I was working in Western Europe and I had a pretty good experience.
It's so bad that "Reshippers" are increadibly popular here (in Australia). They have a US address so you can ship Amazon stuff there, and then either do a bulk shipment of multiple orders to Australia, or else just accept their shipping charges (which are usually 50% of what Amazon charges).
$1000AUD is the de minimis threshold, for both GST and Duties.
Depending on the good, there would be duties as well as GST applied.
(I'm a wannabe trade nerd)
The low prices on Alibaba have a lot to do with sellers that provide zero customer service. For example, order something at the beginning of Chinese New Years. You'll go two straight weeks, or more, no communication, nothing ships. Similar for returns...many just don't support it at all. There's also a fair amount of mispresentation...what ships isn't at all what's pictured.
Amazon, of course, sticks it to sellers that do these sorts of things, so you'll see a cycle where it starts with unbelievable low prices, then the pricing will normalize after Amazon puts the screws to the sellers.
Are you really talking about some specific set of subsidies paid by the Chinese government? Or just the fact that China Post pays a pretty low rate per kg for USPS for delivery to US addresses?
I suppose, technically, it's not a subsidy, but it works like one by setting a fixed, unrealistic cap on rates from the receiving country.
Does the Washington Post count as credible?
https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...
Edit: I have only anecdotal evidence of the other subsidies I mentioned...the Chinese side ones. We buy a lot from China.
Edit 2: You may also hear people complaining about the special ePacket program that the USPS negotiated. This is an interesting Inspector General document on whether it was a good idea; https://www.uspsoig.gov/sites/default/files/document-library...
It does count as credible, but neither that WaPo article nor the link in your 2nd edit even mention the word 'subsidy'.
(My earlier comment already acknowledged the impact of postal charges. I was asking specifically about the 'subsidies' which I've seen mentioned repeatedly, but without any specifics to lend credence to the claim.)
I don't see a remarkable difference between charging someone "less than actual cost" and the word "subsidy".
But, it sounds like you're looking for a credible source specifically on Chinese government subsidies made to Chinese exporters. That would be difficult to find, as it would likely violate treaties...the Chinese government wouldn't talk openly about it.
Not specifically about postal subsidies, but indicative of the controversy "proof" would stir up: https://ustr.gov/about-us/policy-offices/press-office/press-...
OK:
- I think we're in agreement that neither of us is aware of a credible source for the 'Direct help from China' you mentioned in your earlier post.
- Although transitional countries pay less in terminal dues than do other countries, I've not seen data to suggest that the amount paid by China Post to USPS is 'less than actual cost' for USPS to deliver said packages. (I'm presuming by 'cost' here you mean 'marginal cost'.)
Maybe there is a place for a third, truly global competitor?
(disclaimer: used to work at Amazon; frequent customer of both Amazon and Taobao)
Alibaba is a dream job for the best of the best in China, and to be honest, the developer market in China is a lot bigger than that in the US. In all fairness, Alibaba can probably hire a better dev for 50k USD/year than Amazon could for 150k.
But could you elaborate on your claim a little bit? Amazon is not as incompetent as you might think, they have cutting edge logistics and mechanics in terms of delivery, the degree of automation is both futuristic and mind-blowing. Also AWS is definitely the market leading player, Aliyun outside of China has zero chance going against it.
Disclaimer: Ex-Amazon employee, visit the fulfillment center once.
The vast majority of people in China can't come to the US no matter how good of programmers they might be due to immigration reasons. Even if that weren't a barrier, the vast majority of Chinese people don't have the language skills to work in the US. As with many other places, the best coders often aren't the best language students. Think of some of the most well-known and respected programmers in the US. How many of them could function professionally in another language? Very few excluding immigrants.
A lot of the best engineers in the US don't want to work for a huge company. They want to join a start-up or start their own. This isn't usually the case in China. Kaifu Lee has struggled greatly trying to get top talent to consider anything other than a large company like Alibaba or Tencent (or for the government). The Chinese people you meet who are working in the US aren't a very representative segment of the market.
I wasn't speaking specifically of AWS. The territory occupied by Chinese companies is divvied up a bit differently than in the US. Shengda (a gaming company) was a relatively early cloud provider for example, and Alibaba is late to that market. On the other hand, Alibaba also does a variety of things that Amazon doesn't, and its e-commerce is beating Amazon in multiple countries that aren't China.
Alibaba's pace of expansion in developing countries is brisk, they dominate Chinese e-commerce much more thoroughly than Amazon does US e-commerce (80% to ~30%) and most importantly their business model is less capitally intensive than Amazon's. In fact, according to their annual reports, their net margins are clocking it at over 40%!
The one possible caveat that will be interesting to watch is Amazon India. That model is much closer to how Alibaba operates and could be key to winning in other international markets.
Amazon and Alibaba have a lot of of similarities and I don't at all think Amazon is incompetent. Amazon is terrifyingly competent, but just has some problems around reputation amongst prospective employees, partners and pretty much everyone except for customers. Alibaba is also terrifyingly competent, but loved and even leaner and even more efficient.
(I don't have any investment in either company)
Logistics/fulfillment, retail, AWS
There are pretty straight-forward division lines. AWS is already a separate corporation for example and will inevitably be spun-off in the distant future as an independent $75-$100 billion company.