Amazon Innovation
Review 02. What if Amazon entered the Korean market?
What if Amazon entered the Korean market?
I don't think much would happen, actually.
On top of that,
Amazon today is in a crisis.
I think Amazon knows that, which is why it's decorating itself.
Ah — right! Yeah, right?! Or "huh?!" / "yikes" — this is all armchair. ;>
Those who want to leave, leave; those who want to stay, scroll down — let's get it!
Why? 01.
No company is fool enough to expose its current core competency.
For example, even when selling expensive fighter jets, they only sell them when a newer model is available. If fighter jets feel too distant, take merchants as an example. Anyone who's run a shop knows — when business is good, you complain; when it's bad, you loudly boast about how well you're doing.
I think Amazon today is roughly in that mode. Several years ago, right after Google hit its peak, its moves looked very much like Amazon's today. Whether Google or Amazon — no company ever lets that kind of info out either right before or at the peak of its growth.
Why? 02.
Retail is not in crisis. It's big-box retail (large-scale distribution), including Amazon, that's in crisis.
* Before going further, whether it's a translation issue or the author's intent, the "retail market" in this book seems to mean the distribution market. Once again I was reminded how the nuance of a single word can narrow the scope of one's thinking.
So if Amazon, as a big-box distributor, enters Korea, I don't think the impact will be large.
"Correlation isn't causation" — if Korean retailers' positions shrink when Amazon enters, that won't be because of Amazon. It will simply be because the Korean retail market (especially big-box distribution) happens to be entering a structural adjustment period around the same time.
Big-box retail, including Amazon, is shrinking. On the other hand, small-scale retail is spreading out thinly, widely, and flatly.
The author says traditional retail is dying and tech-retail is holding up, but this is a one-sided view. Even if there were supporting metrics, small-scale retail's size and cost flow can't be aggregated transparently, so it's not fit as evidence.
* This pattern is not just about retail — more precisely, big-box distribution. It's a global issue across society. Fashion markets show the same issues, responses, and phenomena. Art markets too. National brands and food markets as well. And IT/electronics markets are also showing signs of change. IoT and 3D printers are becoming more common. Kind of like QR codes in the early days. A long-tail market is spreading very thinly and flatly across society, and this book is just about one famous company in one single category of that phenomenon.
Spin_Off 01.
They probably know, too.
What matters is that Amazon already recognizes the crisis of big-box retail (the essence of their business). And they've seen the endgame from a higher vantage point, earlier than anyone.
To get past that crisis, they devised a powerful growth engine — the flywheel. They started hedging the profit side with infrastructure plays like AWS and FBA. But at some point, probably out of concern over the flywheel's momentum and the need for a fundamental alternative, things like physical stores and private-label (PB) goods entered the discussion.
Physical stores for customer touchpoints, groceries, and frequency expansion… They already have such segmented and classified user info that they don't need to calculate frequency.
Regardless of how dense and state-of-the-art their tech base is, or how large or small their own market is — ultimately, since their business is to act as an agent or distributor for external products, no matter how finely segmented their PBs are, it seems the actual results fall short of expectations.
Isn't that because PB goods or new service products are, at the end of the day, also OEM or just a new shape of partnership?
They are people who innovatively design flow — not product creators. So while it's undeniable that the elements the author calls "core" are what sustain Amazon, I can't agree that those elements are "best-practice examples."
Spin_Off 02.
They are pivoting. And they keep failing.
That's why Amazon is in crisis.
It wouldn't happen, but if today's Amazon entered Korea, there'd be no particularly negative impact.
Instead, Korean companies' learning and absorption would expand.
Of course they'll overcome it. Because they have a powerful culture — they may often be "in the middle of failing," but they have no "failed" instances.
Well — that's their business,.
What we shouldn't overlook is that we mustn't benchmark based only on their polished decoration with naive, vague admiration.
Spin_Off 03.
Commerce itself is being restructured. Actually, we've already reached the point where commerce can't be called commerce.
We're already trading content.
Community itself is already playing the role of commerce.
This really is a spin-off, but… the semiotics and classification of language are also in an adjustment phase.
June 29, 2019 — first Brunch study session
Weak at improvisation,
not as fast as a rabbit, but like the turtle I'm taking my time to jot down these thoughts.
