Amazon | Electric Thoughts in a Digital Era

Why Amazon Prime Now Is Another Trojan Horse

Amazon has entered Singapore in a new fashion that should put new countries on alerts. As I wrote in my newsletter last night that this is potentially a very big future indicator. By using Prime Now Amazon is leveraging local assets (local logistics, staff) to enter Singapore.

This past week Amazon entered Singapore via their on demand mobile app, Prime Now. Amazon has used this country as its market entry into South East Asia. Singapore is not large and thus quicker market entry has been possible. Amazon has used 2 Singapore born staff to go run this new market. By appearing in Appstores instead of via a website Amazon has shown their secretive nature but also how they are going to go into new markets in Asia. This past week should provide more than enough evidence of the future battle that is going to appear more and more, Alibaba vs Amazon. Both have significant capital and desire to enlarge their businesses.

Amazon and controversial warehouse worker non-compete contracts

The last 24 hours is the reason why Amazon has hired Jay Carney, a former Obama spokesperson to be responsible for global corporate affairs. Amazon has seen a fair share of controversy over the warehouse workers and working conditions. As usual the company has largely remained quiet and I believe this is one of the areas in which Carney will be more verbal.

The issue is in my mind – the technology chameleon that does ecommerce (Amazon) is still very reliant on human intervention when packing of purchases are done inside Amazon warehouses. Speed and efficiency which is sold to customers lead to very harsh working conditions for seasonal and temporary workers. Robots who don’t have unions can only work for so many hours until they need recharging. Also sometimes logic is needed for packing which cannot be seen inside a robot.

Google and Product Search

I have been reading and thinking about the latest edition of the ecommerce cold war between Google and Amazon.

Google Inc. plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Amazon.com Inc.

Google has approached retailers about creating a “buy” button for its online shopping site that would be similar to Amazon’s popular “one-click ordering” feature, according to people familiar with the discussions.

It is becoming increasingly clear to me that Google has serious concerns over the ambitions and dominance of Amazon in product search. Bill Gurley made a very interesting point in a recent interview on Bloomberg (video) where he said that Eric Schmidt said the following when asked about their biggest competitor:

If you are looking to buy something, perhaps a tent for camping, you might go to Google or Bing or Yahoo or Qwant, the new French search engine. But more likely you’ll go directly to Zalando or Amazon, where you can research models and prices, get reviews, and pay for your purchase all at once. Research by the Forrester group found that last year almost a third of people looking to buy something started on Amazon — that’s more than twice the number who went straight to Google.

For one thing, these companies are each others’ biggest competitors, because in tech competition isn’t always like-for-like. Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon. They are obviously more focused on the commerce side of the equation, but, at their roots, they are answering users’ questions and searches, just as we are.

The context is important here – Schmidt was talking to a European audience at a time when he was defending Google’s business to European legislators whom are currently looking at Antitrust cases for Google’s various businesses. The point is that Amazon was until this conversation never publicly mentioned as a search competitor for Google huge search index.

Amazon launches Kindle unlimited, eBay has a negative quarter – eCommerce stories of the week

Last week was dominated by 2 stories – eBay posting disappointing results and Amazon unveiling a “all you can read” Kindle package. The eBay news is not surprising – Google hit the company with a search penalty based on low quality content and also eBay is still battling with the after effects of being hacked. Those two elements by themselves will harm any Internet business – together they will harm a large business for a few quarters. The bad results could not come at a worse time for eBay. They have potential competition entering a part of the business (11 Main) and am also facing less than desired results on their eBay Now business.

Amazon seems to be moving at a faster rate than normal with regards to the ecommerce business. The Kindle unlimited service seems to me to be an unAmazon product. The selection at launch is poor (not one of the big 5 publishers has books that you can read) and seemingly this product went to public release inside 7 days. I am still trying to understand why Amazon would want to do this? Is it a reaction to Oyster? Is it to force the big 5 publishers to provide them with ebooks? or is this primarily to drive more revenue to the Amazon published ebooks?

Alibaba vs Amazon – 2014 Edition

When I wrote my first post on Amazon in which I looked at the competitors it will face; back 2012, I had 7 major ecommerce businesses that could destabilize Amazon’s domination in ecommerce:

Amazon is and still is it’s own biggest concern
Apple
Alibaba
eBay
Walmart
Rakuten
Regional players (Netretail, Ozon, MercadoLibre)

Fast forward 2 years and a variety of changes (global economic changes, investments and the rate of offline and online retail convergence) – the above list changes considerably. The growth in single global brand ecommerce businesses has grown remarkably primarily through the globalisation of ecommerce.

Let me be clear – I am of the opinion that regional ecommerce competition is a less of a factor now as the global competitors can at any time launch in a market. Global ecommerce businesses (Amazon, eBay, Rakuten etc) have the potential to invest significantly in a market through funds and staff.