Amazon is on track to command 50 percent of the global e-commerce market by 2021, says Hong Kong-based freight marketplace company Freightos, however wielding that sort of clout in the grocery space, will prove more challenging. “Despite the acquisition of Whole Foods, Amazon still lacks the refrigerated equivalent of the nationwide domestic warehouse space it needs to dominate the grocery space,” Freightos said.
In its Q2 2017 “LogTech” review, Freightos said that Amazon’s next challenge will be to grow past its current 6.6 percent share of import sales in China, by “investing in U.S. export infrastructure to service the expanding Chinese middle-class.”
Such a strategy will, of course, put Amazon on Alibaba’s home turf, and the Chinese rival has the sort of infrastructure and network advantage that would scare off most international competition. However, Amazon CEO Jeff Bezos, on a seemingly monthly basis, demonstrates that he’s willing open the company’s checkbook.
Amazon is notoriously tight lipped with the press, so when it makes an acquisition like Whole Foods, most analysis is speculative, at best. But the Freightos study points out that the online retail giant’s expansion of its private labels offerings, plus the recent acquisition of patents for clothing manufacturing technology, will give Amazon a massive edge in supply chain management.
That strategy also expands the Amazon brand power, and allowing it to hawk its own products at a premium and distinguish itself from other e-commerce platforms in international markets, like China.
Encroachments onto Chinese turf won’t escape the notice of Alibaba CEO Jack Ma, who, Freightos points out, is travelling the globe these days selling international audiences on the Chinese consumer and logistics market. Alibaba-backed Best Logistics is currently planning a US$1 billion IPO in New York, and Ma is doing everything he can to raise the profile of the impending offering.