Unexpected blue ocean? Amazon always has opportunities

Recently, Amazon announced an unexpected news, because the Primeday in India, which was postponed due to the epidemic, set a historical sales record for the site!

In the Indian Prime Day held at the end of July, nearly 130,000 small and medium-sized sellers participated, of which 30,000 sellers set the highest single-day sales record in their store history, accounting for as much as a quarter! The number of top sellers also increased dramatically. Compared with last year's Member Day, this Prime Day achieved sales of more than 10 million rupees, an increase of 25%!

Local Prime members in India also showed extraordinary shopping stickiness. 96% of Prime members on the Indian site placed orders during the Prime Day event, and more than 70% of new Prime members came from India's second, third, and fourth-tier regions.

Because the current epidemic in India is quite serious and the degree of lockdown is extremely high, most people need to work and study at home, and shopping is highly dependent on online e-commerce. In addition, Amazon’s investment in the Indian market in the past two years to establish logistics and mobile networks has lowered the threshold for local online shopping, which led to a huge sales explosion on this Membership Day.

In the post-Amazon era that has experienced the ups and downs of the epidemic, the new CEO Andy's ban on sellers on the US site has forced us to consider the need to deploy in other sites to diversify risks. Today, I will analyze the situation of other sites with you.

When we talk about building a European site, in most cases we are actually talking about the UK site or the German site. The other sites are too small to bear the role of risk dispersion. Let’s focus on the UK site and the German site first.

The advantage of the UK site is that it is the only English-speaking site among several European sites, and there is no language barrier. Sellers can easily translate the products to be listed into the local language, and there is not much difference in SEO and promotion paths from the United States.

The disadvantage is that the scale is still not as good as that of the US site. Because there is no language barrier, the number of sellers is relatively large in the European site, and the competition problem is still relatively serious. The overall profit margin is not as high as that of the US. In addition, tax issues have reduced profits by a large amount. Moreover, Brexit has brought many troubles, and certification, tariffs, etc. require additional learning costs.

The German site is different from the British site in many ways. Since German is a minority language, the German site has set a natural barrier for everyone. Most people think that customer service issues are difficult to solve and that products cannot be listed in German. This inherent thinking has led to the fact that the number of sellers on the German site has not yet reached saturation. In addition, Germany itself has a developed economy and strong consumption power, so the selling price is higher than that of the UK and the US, which is more profitable for sellers.

The disadvantage is that Germany also has VAT, and the tax bureau is very strict. You can't make any mistakes in taxation, otherwise it will lead to store closure and other problems. Secondly, the return rate is very high. Germans themselves pay attention to efficiency. In order to buy the right products as soon as possible, they will even return 9 out of 10. Therefore, you should avoid choosing products with high return rates on the German site, such as clothing.

When it comes to the most successful emerging sites, we have to mention the Japanese site. Before Amazon entered Japan, Japan's online shopping was divided between Yahoo and Rakuten. With the strong entry of Amazon, it has now grabbed the No. 1 position.

The Japanese site has the advantages of fast delivery and developed economy. Since the distance from China is only about 700 kilometers (Shanghai to Kagoshima), sea freight replenishment is much faster than that of Europe and the United States. Even the cheap sea freight generally takes about two weeks, which directly increases the capital turnover rate of sellers on the Japanese site, and has more liquidity to prepare stocks and resist pressure.

The disadvantage is that the electronic products category is about to be saturated, and various malicious attacks are common. Moreover, because it is not as strictly controlled as the US site, the official action in this regard is relatively lacking, and sellers need to spend a lot of time to guard against malicious attacks.

The opening of the Australian site attracted a lot of attention, but ended up with a dismal result. In 2017, the Australian site was opened only to top sellers, with one invitation letter corresponding to one seller. At that time, all the top sellers were scrambling to enter this developed European and American market first to seize the opportunity.

Before the Australian site opened, Amazon conducted a large-scale offline promotion, so the first batch of sellers placed hundreds of orders through self-delivery, but by the next day the number dropped to a dozen or so orders, and after that the traffic almost hit rock bottom.

Amazon's layout in Australia has many problems, with much ado about nothing. On the one hand, this is because the subsequent investment and construction are weak, and there is no end in sight in many aspects such as network promotion and logistics construction, resulting in insufficient front-end traffic and poor back-end distribution. It is really a case of ruining a good hand of cards. Now that the Australian site is fully open to investment, few people are interested.

The Australian site is still under continuous investment and construction. If it is to be used as a branch site, it can still be developed because the consumption habits are highly similar to those of the US site. Sellers who are watching the Australian site should pay more attention to Amazon's work in improving local logistics. It is not ruled out that the maturity of the logistics system in the future will allow the Australian site to revive.

The situation of each site is briefly introduced to you. It is suitable for sellers of different levels to spread the risk. For example, if you are good at selecting products for European and American consumers, you can start from the UK site and the Australian site (if the scale is appropriate). Next year, Amazon account recruitment will basically start to register information in the second half of the year. Sellers who want to expand branches can start preparing materials in advance!