Amazon Wants to Keep its Global Footing with Prime Day

prime-day-295X90On the surface, Amazon’s Prime Day celebration seems to be what it is – a one-day shopping holiday that will probably take place July 15 of every year.

But Prime Day can also be viewed as an attempt by Amazon to remain the dominant global marketplace player. It’s pretty clear, based on a series of events since it went public in January, that Alibaba wants to take Amazon’s crown as the world’s top marketplace.

Prime Day deals are only available to Prime members, and there are an estimated 50 million worldwide. However, there are only about 10 million Prime members outside the United States, and that is where Amazon is looking to grow.

Amazon’s pre-Prime Day promotional material sends a constant reminder that you need to be a Prime member to participate in the shopping event, and that it’s not too late to become a member.  That enticement, plus the promise of great deals, should help Amazon grow its Prime membership abroad.

Amazon Prime Day is taking place in U.S., U.K., Spain, Japan, Italy, Germany, France, Canada and Austria cyberspace. Though Prime Day will just take place in those countries, Amazon also has country-specific marketplaces in India and Mexico, and U.S.-based sellers can also opt to allow for international shipping.

But Alibaba also has massive international growth plans. In May, Alibaba launched a Korea Pavilion on Tmall.com. Then last month, Alibaba said it would expand its pavilion concept into 11 more countries:  United States, New Zealand, Australia, Switzerland, France, Britain, Spain, Singapore, Thailand, Malaysia and Turkey.

Alibaba already has a stranglehold on the Chinese market, where it claims to have a 50% share of the marketplace-fueled country, and Amazon is just one of a handful of secondary players. And Alibaba wants U.S.-based merchants to participate as cross-border sellers to China. Alibaba Group Chairman Jack Ma wrote in an op-ed for The Wall Street Journal last month that his company wants to make it easier for U.S.-based merchants to sell more of their products to Chinese consumers.

Ma also also spoke at The Economic Club of New York on June 9 about the company’s U.S. strategy and international growth plans. In his speech, Ma highlighted how Alibaba Group envisions to help American entrepreneurs, small business owners, brands and companies of all sizes sell their goods to the growing Chinese consumer class.

And if U.S.-based retailers are selling on the Tmall marketplace in China, they might as well also sell in those 12 countries Alibaba is or plans to do business as well.

Alibaba took its own selling holiday, Singles Day, last year. As midnight passed and Singles Day 2014 slipped into Nov. 12 in China, Alibaba reported that Singles Day brought in more than $9.3 billion in sales, an increase of 62% over the $5.75 billion logged in 2013.

For 2014, Alibaba made a special effort to make Singles Day more global through the participation of its international marketplaces that help Chinese merchants sell to consumers in overseas markets (AliExpress) and help foreign brands sell into China (Tmall.com and Tmall Global). Alibaba did not break out country-specific numbers, but said it did see significant global selling success that day in Russia and Brazil, as well as countries Amazon has country-specific sites: Spain, Canada, France, and the U.K. It also lists the U.S. as one of the top 11 buyer countries ranked be gross merchandise volume.

Though Amazon said it will offer more deals on Prime Day than it does on Black Friday, that seems to be where the comparisons to Singles Day end. Analysts and investors aren’t convinced that Prime Day is going to be that big a deal. Capital Advisors managing director Channing Smith told TheStreet.com that Prime Day will be a “modest success.” Smith said the timing from a calendar perspective being in the summer months, plus the lack of awareness of the event from a marketing perspective, are going to hurt Amazon.

Depending on how much Amazon discloses to the public, we should know is Prime Day is a success for Amazon on July 16.

On problem for Amazon though – like Alibaba, it needs U.S.-based merchants to sell internationally via its marketplace. According to Multichannel Merchant’s MCM Outlook 2015, just 16% of respondents use Amazon as a cross-border selling tool. And while nearly 42% of respondents said they use marketplaces in general to expand their U.S. audience, just over 13% said they use marketplaces to expand their global audience.

Tim Parry is the Managing Editor of Multichannel Merchant

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