Many 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 has largely remained local. People around the world don’t all buy kettles and T-shirts from a shared major retailer like Amazon or China’s Alibaba, and maybe we never will.
What does it mean to us if there are never any shared malls for the world? It might be healthy for the earth to avoid becoming a homogeneous blob with a handful of global stores. But it also feels like a challenge to the idealistic idea that the internet can bring the world closer.
Several years ago, Amazon’s financial chief told investors that over time, “customers worldwide behave the same.” So far, that prediction has not come true. Amazon’s financial disclosures show that nearly 90 percent of annual sales come from just four countries: the US, Germany, the UK and Japan.
About 30 years after Walmart’s bid to span the globe, the retailer has been successful in Canada, Mexico and Central America, but not so much elsewhere. E-commerce stars such as Alibaba, South Korea’s Coupang and Latin America’s MercadoLibre have so far taken off mainly in their own country or region.
There are worldwide popular retail brands such as H&M and Ikea, and packaged products from Procter & Gamble. But mostly, mass-market retailers selling many types of products, such as Amazon and Walmart, have defied the digital principle that once an app or business strategy works in one place, it can go big everywhere.
“Retail is just hard to globalize,” said Sucharita Kodali, a retail analyst at research firm Forrester. “It’s been bugging me for years and I’ve been trying to get to the bottom of it. I don’t know if there is one answer.”
Kodali suggested three explanations for why retail powerhouses struggle to become as global as app superstars. Stores in many countries are subject to government regulations that favor the local population. Local retailers and e-commerce companies also have expertise to tailor the shopping experience to their home country. And finally, Kodali said that because it doesn’t take billions of dollars to open a store, there’s often a lot of competition in retail, which makes it harder for a superstar from another country to break into.
Considered to be one of the biggest gold mines for the future of shopping, India is arguably the best place to watch the sweat of international retailers struggling to spread.
In 2014, Amazon founder Jeff Bezos made a highly publicized trip to India and stated that the country would be the focus of the company’s international expansion. A few years later, Walmart acquired the Indian e-commerce company Flipkart. Alibaba has also tried e-commerce in India.
The companies don’t give a lot of financial details about how they are doing in India. According to most accounts, Amazon has made significant progress, but has also had major setbacks. Recently, Amazon was outmaneuvered in an ugly legal battle after one of India’s major corporations, Reliance Industries, acquired a major retail chain. It was a sign of the uphill battle for the emerging global retail powers there.
Digital-only companies such as Facebook’s parent company Meta, Twitter and TikTok have also faced complex regulations and stiff local competition in India. But the country is the largest market for users of facebook and YouTube. Amazon and Walmart can’t say that. Until about a year ago, Amazon retail sales in North America often grew faster than sales outside its home market.
Before speaking to Kodali, I’d thought Amazon was having unique difficulties translating a blueprint that had been spectacularly successful in a few countries to the rest of the world. But she convinced me that this isn’t just Amazon’s problem.
The flip side of the difficulty of creating retailers around the world is that it creates breathing space for country-specific or regional power players to beat giants. Coupang, Jumia in parts of Africa and Carrefour in France have more opportunities to thrive and tailor shopping experiences for locals.
It could be a good thing for the world if shopping doesn’t become as world famous as the rest of technology.
To learn more about Amazon, check out Bloomberg’s ongoing podcast series that explores Amazon’s past and present. (You can listen on Apple Podcasts or wherever you listen to podcasts.)
Before we go…
The Feedback of Misleading Claims About the Invasion of Ukraine: My colleagues Sheera Frenkel and Stuart A. Thompson report on the false stories of the Russian war circulating between the US far right, the Kremlin and back again. “Together they have created an alternate reality,” they wrote.
The downside of fantasy sports: Gambling is illegal in India, but there are no clear rules for fantasy sports apps, which have grown in popularity. Rest of the World examined the spike in gaming and gambling addiction among Indians betting on the results of cricket matches and other sports.
“Baby Shark” EVERYWHERE: South Korea’s Pinkfong, the company behind the catchy nursery rhyme, plans to expand the “Baby Shark” franchise into a movie, digital comics and novels, and (of course) NFTs, Bloomberg News reports. (A subscription may be required.)
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Is this dog howling “kazoo?” Or what? (Thanks to Twitter famous @darth for sharing this.)
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