Specialist
Former Sales Manager at Amazon Japan GK
Agenda
- Amazon Japan’s (NASDAQ: AMZN) GMV trends, product strategies, supply chain management and customer acquisition
- Competitive positioning and pressure from tier two competitors
- Industry trends – development of vertical e-commerce players, advertising revenue, customer retention and CACs
Questions
1.
Which product categories do you think are Amazon’s largest GMV drivers in Japan?
2.
You mentioned that consumables and electronics are particularly strong for Amazon in Japan. But those categories also perform well for other e-commerce players. What would you highlight as Amazon’s key competitive advantage over other e-commerce companies in Japan?
3.
Why would a consumer in Japan prioritise Amazon over other e-commerce players when purchasing online?
4.
Are there other categories that Amazon can leverage as its next growth driver in Japan, besides consumables and electronics?
5.
According to public reports, Amazon has recently put a lot of effort into developing its online grocery retail. Can you elaborate on that business segment, and the advantages for Amazon in developing it?
6.
You raised a key point regarding the definition of online grocery. In some of Amazon’s other markets – such as the US – it has developed a well-rounded system for the fresh food market. Is Amazon also selling fresh food online in Japan, and what is your growth outlook for the business if so?
7.
Would you say Japanese consumers are relatively comfortable buying fresh food online? Or is it still at a stage where Amazon needs to spend a large amount of money educating and leading customers here?
8.
Can you elaborate on the profitability of fresh food e-commerce in Japan? In the US or China, the online fresh food segment is low-margin. How could Amazon potentially improve its margins here?
9.
You outlined a 10% YoY growth estimation for Amazon Japan in 2020-21. What is your 2-3-year growth outlook for its online fresh food segment specifically? Do you expect it to outpace that 10% growth?
10.
A lot of traditional offline retailers in China and the US have also established online businesses, which have certain advantages over pure e-commerce players. How would you grade Amazon’s advantages and disadvantages vs those traditional offline retailers who start an online business?
11.
There have been concerns around the weakening economic situation impacting AOVs for e-commerce players in China and Japan. How do you think Amazon can potentially increase – or retain – its AOV?
12.
You mentioned increasing the number of Prime members as a potential method for Amazon to drive a higher AOV. How can it facilitate this conversion from a regular customer to a Prime customer?
13.
You highlighted TV commercials as a ways to potentially increase the proportion of Prime members for Amazon. While they may typically have a higher AOV vs non-Prime, is there a concern the high cost of these commercials would essentially render Prime members low-margin customers?
14.
Do you think Amazon’s Prime members in Japan have significantly higher AOVs than non-prime customers?
15.
You pinpointed cross-selling discounts as another potential way to drive increased AOVs for Amazon in Japan. Do you think a large proportion of customers typically embrace this kind of cross-selling offer?
16.
Do you think there is a strong growth runway for Amazon’s AOV in Japan, or has it reached a ceiling?
17.
Can you elaborate on Amazon’s broader customer acquisition strategy in Japan? You highlighted TV commercials as a key channel, while its competitors seem to focus on leveraging channels such as offline events or on online advertising.
18.
Do you think Amazon Japan’s online advertisements – whether through Google, Facebook, e-mail campaigns, etc – are effective relative to its other marketing activities? Would you say it spends its marketing budget in an efficient and effective way?
19.
Do you think CACs will continue to increase for Amazon in Japan? There are similar concerns for e- commerce companies in China, with rising numbers of competitors and a potential market saturation.
20.
Do you think Amazon is concerned about CACs in Japan? It is public that it has spent massively on marketing events.
21.
Do you think Amazon’s CACs are higher than its main competitors’ in Japan?
22.
Rakuten has exhibited strong growth in its e-commerce business. Can you outline the advantages and disadvantages between Amazon and Rakuten in Japan, regarding their B2C e-commerce?
23.
How do Amazon’s and Rakuten’s customer profiles compare? Do you think they are targeting the same customer?
24.
How would you expect Rakuten to develop its strategies in Japan to better compete with Amazon?
25.
A number of e-commerce players in the US and China are developing financial services, including payments or banking. How could Amazon do that? What would be the impact if it were successful?
26.
How does Amazon address this seemingly competitive market for online payments and build up its competitive advantage? Some e-commerce companies offer online payment services, Apple Pay or Samsung Pay could obviously be significant, and there are retailers or even auto companies providing these services.
27.
Do you think Amazon is establishing this online payments business to acquire more customers for e- commerce? Or do you think it wants to turn these payment services into a significantly profitable business?
28.
How do you expect Amazon to reach profitability in its online payments business?
29.
A lot of industry analysts believe that top-tier e-commerce in Japan – including Rakuten or Amazon – could be faced with rising competitive pressure from second-tier and vertical players. How would you characterise the competitive pressure from the relatively small players on the likes of Amazon?
30.
There are a lot of vertical e-commerce players in China, including those who focus solely on the fashion industry, or products for mothers and babies. Do you think there is a similar trend towards strong vertical players in Japan? If so, which verticals have these players established themselves in recently?
31.
Can we conclude by summarising your outlook for Amazon’s growth strategies in Japan?
Gain access to Premium Content
Submit your details to access up to 5 Forum Transcripts or to request a complimentary one week trial.
The information, material and content contained in this transcript (“Content”) is for information purposes only and does not constitute advice of any type or a trade recommendation and should not form the basis of any investment decision.This transcript has been edited by Third Bridge for ease of reading. Third Bridge Group Limited and its affiliates (together “Third Bridge”) make no representation and accept no liability for the Contentor for any errors, omissions or inaccuracies in respect of it. The views of the specialist expressed in the Content are those of the specialist and they are not endorsed by, nor do they represent the opinion of, Third Bridge. Third Bridge reserves all copyright, intellectual and other property rights in the Content. Any modification, reformatting, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, transferring or selling any Content is strictly prohibited