Company / division: Amazon
Amazon Expands Program Paying Popular Alexa Developers (Aug 16, 2017)
A company that owns technology for producing ready to eat meals that don’t require refrigeration says it’s been talking to Amazon about it, and that Amazon is looking into providing the food as part of its groceries offering. Because the food produced using the technology can stay on an unrefrigerated shelf for up to a year, it’d be a great fit for the more standard UPS-based delivery Amazon uses for non perishable items and wouldn’t require the much greater density of delivery infrastructure Amazon’s fresh grocery service does, and could therefore be offered much more widely. It’s a bit surprising to hear an Amazon partner (or potential partner) talk this openly about its relationship given Amazon’s general secrecy, which may yet scupper the deal. And the technology is still awaiting FDA approval, so there’s nothing imminent anyway. But it’s yet another sign that Amazon is really serious about making a bigger push in groceries, and that that push isn’t going to be restricted to just the Whole Foods footprint it’s in the process of acquiring.
NDTV’s Manish Singh has an interview with the head of consumer electronics sales for Amazon in India which provides several interesting insights on trends around smartphone sales there. It seems Amazon’s sales of smartphones in India have risen dramatically in India over the past year, up 100% overall but up by far higher percentages in the smaller cities around the country. Perhaps more importantly, Amazon is finding that a smartphone is often the first purchase a customer makes through the site, but in many cases turns the customer into an Amazon convert, with many other purchases following that first positive experience. In a sense, this is the equivalent of Facebook or Google pursuing strategies to expand internet access: the efforts are designed to create new potential customers who are more likely to be loyal to Amazon, though this would be even more effective if Amazon launched its own devices, something NDTV has previously reported it was working on. The piece here also talks about Amazon’s strategy of offering the broadest possible range of devices and brands while also securing the odd exclusive including phones from OnePlus and a particular model of the iPhone. That’s an interesting strategy in a market where a majority of smartphone sales are still made in offline retail, but online is an increasingly important channel. Overall, some good insights into both Amazon’s India strategy and the Indian smartphone market. Also worth noting: this separate story from NDTV on the new Nokia 6 (from HMD Global) hitting 1 million “registrations” (effectively a soft pre-order) on Amazon’s website in India, which is running some special promotions and bundles around the phone.
Anker Debuts Cheaper Echo Dot Competitor Featuring Alexa (Aug 9, 2017)
Essential, Android founder Andy Rubin’s fledgling smartphone outfit, has announced additional funding from companies including Tencent and Amazon, but still refuses to say exactly when its smartphone will go on sale, saying only that a date will be announced in a week or so. It’s also announced that Amazon and Best Buy will be the retail partners for launch, while Sprint was announced earlier as the exclusive US carrier partner. If you’ve read any of my previous pieces on Essential, especially the first one, you’ll know how skeptical I am that an effort like this can succeed. The market is so mature at this point and the distribution and other battle lines so clear that breaking in with yet another Android phone will be a real challenge, one further exacerbated by what’s going to be limited distribution on the weakest carrier in the US. The funding is therefore intriguing, because it suggests these backers see something in the phone that I don’t. Importantly, it’s Amazon’s Alexa Fund specifically that’s making that company’s investment, something the Journal piece I’m linking to here doesn’t dig into at all, but which suggests that the phone will major on Alexa integration, something hinted at earlier by Andy Rubin as part of a statement about the phone’s ecumenical approach to voice assistants, but not made explicit. And backing from both Foxconn and Tencent is intriguing in the context of a phone that’s mostly being launched in North America for now. Recent conversations I’ve had suggest Amazon’s smartphone sales business is going very well, but of course many of its sales are of the kind of low-end prepaid handsets people buy outright anyway rather than the higher-end premium hardware Essential will be selling. I continue to be very bearish on Essential, but at least it sounds like we might finally see the hardware hit the market soon.
Amazon Has Over a Dozen Unmarked Private Label Brands (Aug 7, 2017)
Amazon Forces Refund Changes on Angry Sellers (Aug 2, 2017)
★ Amazon Reports Strong Growth, Much Smaller Margins in Q2 (Jul 27, 2017)
Amazon Uses Singapore as Beachhead for SE Asian Expansion (Jul 26, 2017)
TechCrunch reports that Amazon is launching in Singapore as the first step in an expansion into South East Asia, and other publications have reported that the Prime Now app is live in Singapore. Singapore is a great starting point for Amazon in the region, with high GDP per capita, a small and densely populated area, and proximity to other markets such as Malaysia, Indonesia, Thailand, and so on. As such, a successful launch there could easily serve as a beachhead for expansion into the rest of the region. After a couple of years of higher profits, Amazon appears to be upping investment in growth again in recent quarters, and its international expansion has been a big part of that push, with an acquisition in the Middle East, early moves in Australia, and now this launch. The context for all this, though, is that Amazon is still active in only relatively few countries with its full set of offerings including Prime. Only thirteen countries were included on Amazon’s list of top selling items on its recent Prime Day, and 92% of its global revenues come from just four countries: the US, Germany, Japan, and the UK. That’s easy for those of us in the US to forget, but Amazon is still far from ubiquitous globally and major players dominate e-commerce in several important markets. In Singapore and the rest of SEA, Amazon faces some existing strong competitors backed by some of those larger players from Asia, including Alibaba, so it’s going to be far guaranteed that it enjoys US- or UK-level dominance. But brand awareness seems to be high in the region already and it has a decent shot at establishing a good business in Singapore and beyond.
Amazon’s Meal Prep Service Has Already Quietly Launched (Jul 18, 2017)
It turns out that the Amazon meal prep service suggested by a recently filed trademark application has already launched quietly in some areas, including Seattle. Just as I suggested in my piece yesterday, it seems the service is being offered as a feature of the Amazon Fresh grocery shopping service, and is dubbed Amazon Meal Kits. Just as Amazon’s recently launched clothing box service Prime Wardrobe ditches the subscription element common with competing services, so the Meal Kits are one-off purchases rather than a subscription, which lowers the barriers to trying it out. The product is a box of ingredients with instructions on how to prepare a meal, and GeekWire managed to find a customer who’d used the service and enjoyed it. With the fairly low profile MealKits have for now, it’s not likely to have an immediate impact on competitors like BlueApron, but as it ramps up and starts to be promoted more heavily, it will start to gain significant share in this market where it’s available.