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Amazon in Emerging Markets

Amazon used an approach for its entry into the Indian market that involved directly investing in the market by building its own subsidiary. Being a service company, the company went into full-scale delivery and marketing of its eCommerce service by building, Amazon.In. from scratch. As opposed to the method the company used in China, the green venture the company applied in India meant creating the entire operation. Because the technique involved taking care of all the marketing activities in this foreign market, Amazon had to invest a lot (Michigan School of Business). Also, instead of focusing on the competition, Amazon chose to concentrate on offering top-notch services to the Indian market.

The advantages of the green venture strategy were that Amazon was able to maintain complete control over its operations in this new market. The company did not have to worry about spending money on a subsidiary or sharing profits with another entity. The element of risk was possibly the most dominant con after investing so highly on all the expenses required to set up the business and operate it. In new markets as volatile as India, there is always the fear that a company would not be able to recoup its money.

In China, however, Amazon chose the most uncomplicated strategy for entry that involved buying an established company in Joyo.com. This strategy, unlike green venture applied in India, gave Amazon a claim to Joyo.com’s market share. The company also maintained Joyo.com’s domain name, continuing to use its customer base and brand image. The ability to claim this market share and take advantage of an already established base and brand image was among the various pros of using this strategy (Zhu & Qihong). The other advantages included the chance to bypass regulations on this industry for new investors with ease. These regulations would later offer a cushion against competition from outside using a different entry strategy.

The downside of the entry strategy used in China was that Amazon could not initially connect its operations to its brand. The acquisition was also quite expensive, especially because Joyo.com was thriving. It was also had to conduct due diligence on a foreign company.

Works Cited

Michigan School of Business. Amazon in Emerging Markets. WDI Publishing, 2014. file:///C:/Users/Ken/Downloads/amazon%20article.pdf. Accessed 4 Feb. 2020.

Zhu, Feng, and Qihong Liu. “Competing with complementors: An empirical look at Amazon. com.” Strategic Management Journal 39.10 (2018): 2618-2642.