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Amazon Hasn't Seized the World, But It's Working on It: Gadfly

Amazon Hasn't Seized the World, But It's Working on It: Gadfly
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By    |   Friday, 06 October 2017 07:00 AM

Without question, this has been a peak year for Amazon.com Inc. paranoia. The company seems to be everywhere, eager to crush or absorb anything in its path. For you "Star Trek" nerds, Amazon is the Borg.

But this fear has obscured a harsh reality: Unlike most other U.S. technology superpowers, Amazon is not very worldly. 

Amazon's Planned Investment in India: $5 billion

Two-thirds of Amazon's revenue comes from sales in the U.S. Amazon Prime is available in a dozen or so countries, but it's not big in many of them. Just four countries -- the U.S., Germany, Japan and the U.K. -- contributed 92 percent of Amazon's $136 billion in revenue for 2016. Amazon is global in theory but successful in only a few places. 

For comparison, 15 percent of Facebook's daily users, and almost half its revenue, came from the U.S. and Canada last year. Both Facebook and Google apps are ubiquitous in many countries. About 80 percent of Intel Corp.'s revenue comes from outside the U.S. Netflix Inc. now has more subscribers overseas than in its home country. 

Conforming with Amazon's Borg reputation, the company doesn't intend to stay homebound for long. And with a glass-half-full view, Amazon's geographic concentration is an opportunity for more riches as the company looks to break out of its domestic bliss. 

The biggest global prize is India, where Amazon has pledged to spend $5 billion to break into what many technology companies see as a future gold mine. Read Saritha Rai's excellent stories about Amazon adapting to shoppers' needs in the country by building warehouse capacity, coaching small merchants on how to photograph and market their products for sale online and coming up with tricks to make deliveries on India's chaotic roads. 

Amazon also said on Wednesday that it would sell some of its Echo voice-activated speakers in India for the first time, with a new (English language) voice with local pronunciations. Amazon's failures to crack e-commerce in China are legendary, and it doesn't want a repeat. Amazon is also exporting strategies it employed in India. Bloomberg News reported Thursday that Amazon is testing in the U.S. a delivery service that began in India two years ago. 

And Amazon isn't stopping there. This week, publications in France have been packed with news and rumors that Amazon is looking to team up with or take over companies involved in grocery sales or food distribution.

Amazon's globe-trotting will inevitably spark backlash, as Google and Facebook know well. Amazon has already felt this heat, most recently in the form of a 250 million euro bill ($293 million) over what European officials deemed to be illegal tax breaks from Luxembourg. This isn't specific to Amazon Web Services, but some European customers defected to local cloud-computing providers after revelations that U.S. intelligence agencies collected data from U.S. tech companies.

Changing Amazon's parochial present is going to take some savvy work, and no doubt the company will fall on its face occasionally. But if Jeff Bezos fulfills his ambition, the world and not just nearly every American industry will come to fear Amazon. 

A version of this column originally appeared in Bloomberg's Fully Charged technology newsletter. You can sign up here.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

© Copyright 2018 Bloomberg L.P. All Rights Reserved.

   
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Without question, this has been a peak year for Amazon.com Inc. paranoia.
amazon, delivery. online, retail
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2017-00-06
Friday, 06 October 2017 07:00 AM
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