Regardless of the language you speak and where you are in the world, the process is always the same: you click on the product, add it to the cart, make the payment and, sometimes, on the same day you receive it in your home. This is Amazon, you only need an internet connection and access to the platform. For the user, the process is extremely simple but, behind it, there are a whole series of logistical and strategic elements in which the king of marketplaces works every day .
Amazon's Goal
Ever wondered what's Amazon's expansion accross the globe goal? Well, obviously is revenue but, another one, is that the packages arrive anywhere in the world in the shortest possible time.
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Especially after more than a year of unprecedented growth in ecommerce due to the health context, it is not surprising that Amazon is putting all its efforts to expand its borders and improve its logistics network . We recently came across the news that Amazon was taking another step into the Middle East market by opening the doors of Amazon Egypt . But, let's go by parts, what have been the most outstanding movements in terms of marketplace expansion?
Long gone are the days when Jeff Bezos' company only operated in the United States and was known as an online bookstore. In the last quarter of 2020, sales on Amazon's international marketplace registered a growth of 57% compared to the same period last year , which represents almost 31,000 million euros. This has been the largest quarterly increase since Amazon began detailing sales that occurred outside the US back in 2015.
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TACTICAL ARBITRAGEAmazon's European marketplaces
The first steps in the expansion of the Amazon empire in the international market date back three years after its launch in the US in 1995, when it reached the UK and Germany. In 2000 he continued in France and it was not until a decade later that he arrived in Italy . A year later, in 2011, the e-commerce site went live in Spain . The case of the Netherlands was different, since it arrived in the Dutch country in 2014 selling only electronic books and its Kindle electronic reader and it was not until 2020 when it began to work selling physical products.
That same year, Amazon lands in Sweden . Interestingly, very few Swedish companies joined the market, but more than 40,000 sellers around the world were present at this launch. Many of Amazon Sweden's products come from auto-translated listings in other Amazon marketplaces, allowing you to have an extensive catalog from day one.
This is precisely one of the keys to Amazon's expansion in Europe: thousands of external sellers offering a wide variety of products combined with listings automatically translated by the platform and the huge logistics network. This is how Amazon arrived in Poland in March 2021. This country already had several logistics centers that were created there since 2014, so the launch took advantage of Amazon's existing infrastructure. Something similar happened with Amazon Turkey, when just a few weeks ago, marketplace sellers found an email in their inboxes announcing that, unless they manually overridden it, their listings would be translated and synced with the Turkish marketplace. , becoming available to users in the country.
Slowly but surely, Amazon's distribution network in Europe has grown to such an extent that customers receive their packages across most of the continent within two days. Added to this, the platform's thousands of sellers can enable any new market with a single click and take advantage of their supply chain . In fact, it is important to note that the Paneruopean program modality has recently been enabled in the Netherlands, Sweden and Poland, thus being present in all European countries.
Parallel to Amazon's expansion in Europe, the marketplace was also strategically gaining a foothold in the Middle East market , where it found its perfect ally in SOUQ.com, the largest e-commerce platform in the Arab world that it acquired in 2017 for a substantial figure. A couple of years later, this website in the United Arab Emirates was renamed Amazon.ae and, in 2020, Saudi Arabia's SOUQ.com became Amazon.sa. In 2021, the marketplace again took a step forward and announced that it would carry out the same movement with the Egyptian site and, indeed, as a result of this, Amazon.eg was born.
The secret to this expansion?
A solid strategy resulting from an analysis and knowledge of the market and a process of adapting the brand to the market and vice versa.
We already know in which countries Amazon operates, but how does the infinite traffic of packages from one side to the other sustain itself? The backbone of the marketplace is its logistics and it is that Amazon has more than 175 logistics centers and more than 13 million square meters where the entire logistics process is managed from start to finish: from the arrival of the sellers' inventory to the shipment direct to customers.
These warehouses, which total more than 250,000 employees worldwide, are spread across North America and Europe , with more than 110 and 40 centers respectively. In the specific case of Spain , where the marketplace is accelerating its expansion at a dizzying pace, the logistics network expects to exceed 15,000 permanent employees by the end of 2021, doubling its permanent workforce in our country in two years.
Not only is it committed to opening warehouses in different parts of Spain, but also to increasing its physical presence in terms of corporate offices. In 2016, Amazon chose Madrid to install its development center in southern Europe and, since then, more than 100 engineers have worked in the development center with the aim of developing new functionalities and services for the different European websites of the marketplace.
Amazon, to this day, seems unstoppable. Its continuous and constant conquest throughout the planet is measured to the millimeter, carrying one strategy or another depending on the chosen country. The keys to this expansion: knowledge of the market but also of its own structure. The logistics elements of the marketplace are its greatest value, including the human one. So much so, that a few days ago we woke up to the news that Amazon will pay for studies, including university, to 750,000 of its employees in the United States. The amount that Amazon is going to invest in this action is neither more nor less than 1,200 million dollars, between 2022 and 2025. The only requirement is to have a minimum of three months contracted by the company. This fact coincides with an increase in the workforce of up to 400,000 new workers due mainly to the boom in electronic commerce motivated by the pandemic, thus making Amazon the second largest employer in the US, only behind Walmart supermarkets. The objective? Motivate and retain your less qualified employees, as well as attract new hires.
Amazon's boundaries are fuzzy and expanding by the minute. We have already seen what its expansion has been in recent years, where will we be in a decade?
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About the author
Jordi Ordonez
I work as an independent eCommerce and Amazon consultant.
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Estrella Damm, Intersport, Bella Aurora, Lladró, Textura Interiors, Nice Things Palomas, Castañer, Due-Home and many other clients.
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I teach and have been a speaker at: Meet Magento, Prestashop, Prestashop Day, SEMRush, Cambra de Comerç Barcelona, ClinicSEO, Ecommbeers, Ecommbrunch, Ecommercetour.com, Ecommfest, EOI, ESIC-ICEMD, Foxize, Generalitat de Catalunya, Inesdi, Quondos and The Valley.
In addition, I have done in-company trainings for brands such as Orange and Adidas.
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