Marco Mari. Working Paper. “
When customer-centricity is not enough: lessons from Amazon’s ventures in emerging markets.”.
Abstract
This case analysis critically examines the successes and pitfalls of Amazon's ventures into emerging markets of China, Brazil, and India from 2004 to 2014. The exploration is anchored in the frameworks of Khanna and Palepu (2010) and Prashantham and Yip (2017), considering the company's entry timing, barriers encountered, competitive advantages, collaboration strategies, and adaptability to local conditions. The analysis elucidates the divergent outcomes based on varied market strategies and reveals that Amazon's quintessential customer-centricity, while advantageous, was insufficient in navigating unique institutional and infrastructural challenges of these markets.
Amazon's contrasting strategies—early acquisition of Joyo.com in China, cautious entries in India and Brazil—exposed its capacity to leverage global expertise. Yet, it also revealed a deficiency in understanding and addressing the nuanced intricacies of local markets, leading to a weaker performance against established local players like Alibaba, Flipkart, and MercadoLibre. Furthermore, the essay critiques Amazon's inability to effectively collaborate with local entities and suggests a more assertive, localized approach, such as forming joint ventures or investing in local startups.
The analysis concludes with strategic recommendations for Amazon's future engagements in emerging markets, emphasizing the importance of leveraging its formidable financial capacity and technological prowess. It proposes the transition from Amazon's traditional customer-centricity to a novel concept of market-centricity, involving the acknowledgement of all intermediaries, not just end users, when entering new markets. By presenting itself as a significant investment partner rather than an operational competitor to national champions, Amazon could better navigate institutional voids, maximize growth potential, and achieve global scaling through synergies and grand strategies.