Many of the apps that Americans use are also popular around the world, at least outside of China. Facebook, WhatsApp, Google and YouTube, TikTok, Uber and Netflix are shared global experiences.
But shopping online or in stores is still mostly local. People around the world don’t all buy teapots and t-shirts from a major shared retailer like Amazon or China’s Alibaba, and we may never do so.
What would it mean for us if there were never universal shopping malls for the world? It might be good for the Earth if not to become a homogeneous mass with a handful of global stores. But it also serves as a challenge to the idealistic notion that the Internet can bring the world closer.
A few years ago, Amazon’s top financial executive told investors that over time, “customers behave the same globally.” So far, that prediction has yet to materialize. Amazon’s financial disclosures show that nearly 90% of Amazon’s annual revenue comes from just four countries – the US, Germany, the UK, and Japan.
During Walmart’s roughly 30-year global push, the retailer has had success in Canada, Mexico, and Central America, but not so much elsewhere. E-commerce stars like Alibaba, Coupang in South Korea and MercadoLibre in Latin America have so far mostly grown in their home countries or regions.
There are globally renowned shopping brands such as H&M and Ikea, and packaged products from Procter & Gamble. But for the most part, mass-market retailers selling a wide range of products like Amazon and Walmart have defied the digital principle that once an app or business strategy works in one place, it can grow. thrive everywhere.
“Retail is hard to globalize,” Sucharita Kodali, a retail analyst with research firm Forrester, told me. “It bothered me for years and I tried to get to the bottom of it. I don’t know that there is a single answer. ”
Kodali suggested three explanations why it is difficult for retail companies to become global app superstars. Retail stores in many countries are subject to government regulations that tend to favor locals. Local retailers and e-commerce companies also have the expertise to tailor the shopping experience to their country. And finally, Kodali says that since it doesn’t take billions of dollars to open a store, there’s usually a lot of retail competition, which makes it harder for superstars from another country to penetrate.
India, billed as one of the biggest goldmines for the future of shopping, may be the best place to see the sweat of international retailers struggling to spread.
In 2014, Amazon founder Jeff Bezos took a tour of India and announced that the country would be the focus of the company’s international expansion. A few years later, Walmart took over Indian e-commerce company Flipkart. Alibaba has also been testing e-commerce in India.
The companies did not provide many financial details on how they are operating in India. By most accounts, Amazon has made significant progress, but there have also been major obstacles. Amazon recently succumbed to a nasty legal battle after one of India’s major conglomerates, Reliance Industries, took over a major retail chain. It’s a sign of uphill battle for the ambitious global retail powerhouses there.
Digital-only companies like the parent company of Facebook, Meta, Twitter and TikTok have also resisted complicated regulations and stiff local competition in India. But this country is the biggest market for users Facebook and YouTube. Amazon and Walmart can’t say that. Up until about last year, Amazon’s retail sales in North America generally grew faster than those outside the domestic market.
Before speaking with Kodali, I thought that Amazon had its own difficulty in translating a design that had been spectacularly successful in a few countries to the rest of the world. But she convinced me that this is not an Amazon problem alone.
The flip side of the difficulty of establishing retailers globally is that it creates breathing space for specific regional or national power companies to outpace the dominant giants. Coupang, Jumia in parts of Africa and Carrefour in France have more room for growth and offer a tailored shopping experience for locals.
That could be a good thing for the world if shopping doesn’t go global like the rest of tech.
For more on Amazon: See Bloomberg’s ongoing podcast series Dig deep into Amazon’s past and present. (You can listen on Apple Podcasts or wherever you listen to podcasts.)
Before we go…
Feedback loop on misleading claims about the invasion of Ukraine: My colleagues Sheera Frenkel and Stuart A. Thompson report on misinformation about the Russian war being spread between the far right in America, the Kremlin and back. “Together, they created an alternate reality,” they wrote.
The flip side of fantasy sports: Gambling is illegal in India, but there is no clear regulation for the increasingly popular fantasy sports apps. The Rest of the World looked at the spike in gaming and gambling addiction among Indians who bet on the outcome of cricket matches and other sports.
“Baby Shark” EVERYWHERE: South Korea’s Pinkfong, the company behind the hit children’s song, plans to expand the “Baby Shark” brand into movies, digital comics and novels and (of course) NFTs, Bloomberg News reports. (Registration may be required.)
Is this dog howling “kazoo?” Or something? (Thanks to Twitter celebrity @darth for sharing this.)
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