Reuters reports that Amazon is making arrangements to build a million-square-foot distribution center just outside of Mexico City as part of a ramp up in investment south of the border. As of right now, as far as I can tell, Amazon has one 400,000 square foot distribution center in Mexico, and the million square foot size is typical of Amazon’s larger centers in the US, so this would be a pretty big expansion. The Reuters article quotes Amazon’s revenues in Mexico last year as being around a quarter of a billion dollars, which would be 2% of its revenues generated outside its four largest countries (the US, Germany, Japan, and the UK), which in turn generate 92% of total revenues. So it’s a fraction of a fraction of Amazon’s global business today, despite being a neighbor to by far its largest market, the US. The Reuters article does a good job talking through some of the challenges for Amazon in operating in Mexico but also some of its early successes. Amazon has been able to become truly dominant in e-commerce in just a handful of markets globally, and it seems as through Mexico is in the mold of other countries where it’s been able to do so, rather than more like India or China, where it’s faced more obstacles. As such, Mexico could grow nicely in the coming years, but is never likely to become one of the biggest markets for Amazon.
It’s clear that Amazon has felt the need to compete with Netflix’s global launch almost a year ago, but its own global offering is sparse and inconsistent. The lack of localization (or in some cases any local offering at all) is one of the most overlooked issues in consumer tech – so many services we take for granted in the US simply don’t exist or are pale imitations of themselves in other markets. Apple, Google, Microsoft, and Netflix have all done well to make their offerings at least somewhat global, but Amazon is still very early in this game.
Uber’s Drive Into India Relies on Raw Recruits – WSJ (Dec 22, 2016)
There’s been so much focus on Uber in China, which is obviously a massive market for ride-sharing, and where Uber has ultimately had to concede defeat. But there are interesting challenges with regard to expansion into other emerging markets like India.