Amazon and E-commerce

First of all, Amazon was founded in 1994. It took the advantage of the emerging period of Internet to develop its online shopping industry. People from all over the world, as long as they can get access to the internet, they can look through the website of Amazon.com. Nowadays, it’s a common sense that online shopping accounts for a lot of share in the market, but the managers didn’t knew it at the very beginning of the emerging of internet. As a result, the managers in Amazon had a very good foresight of the development of online shopping. Moreover, they create innovative site features to cater to the taste of consumers. Consumers can search some inside page of the book, and the searching engine is very human, approachable and responsive.

Secondly, not only Amazon takes the most of the e-commerce, but also the M&A (Mergers and acquisitions) strategy helped Amazon to get access to the international market. In order to meet its ambitions in entering the global market, it’s necessary to take some actions to purchase some of the e-commerce corporations in the local market. Amazon purchased Chinese local e-commerce company Joyo.com in 2004 to totally enter Chinese market. M&A can help a company to increase the value generation, cost efficiency through economic scale and market share (Finance). By purchasing local corporations, Amazon could build up itself to compete with other rivals in the local market. At the same time it can also reduce some rivals by cooperating with then rather than competing.

“In fact, five of the six most visited Web sites are already Amazon.com Associates. Yahoo and Excite are marketing products from their Web sites. So are AOL com, Geocities, Netscape, and tens of thousands of other sites both large and s...

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...t by e-commerce way, which can both profit for Amazon and its suppliers. On the other hand, through this way, Amazon can also build its own brand loyalty from attracting the consumers of those local brands. More over the customers who come to buy the original products will notice some promotion advertise for other Amazon special highlight merchandises.

Another important barrier is the transaction cost for Amazon, especially the overseas shipping cost. It is inevitable to some extent. It is common sense that the most highlight business part for Amazon is e-books field. Amazon knows that it is hard to cut down the transaction cost of paper book. As a result, it pays more attention to the development of e-book industry rather than only sticking to the physical books. I think that’s why we will always see the promotion of kindles anytime when we log on to Amazon.com.