Amazon’s global approach has helped entice local shoppers
Company’s president in China talks about his strategy to expand brand
Doug Gurr shops almost entirely online. During the last Black Friday and Christmas holiday seasons, the president of Amazon China set himself the target of trying to buy everything on the Internet.
Naturally, it had to be purchased through Amazon.com Inc, the largest Web-based retailer in the United States. Gurr nearly succeeded.
In the end, two items proved difficult to find on Amazon — a bottle of Tomasello wine and a hiking jacket. Immediately, he sent his team out to search for the products.
After all, Amazon has built its reputation on being the “everything store” and is seen as the original model for online sales across the world. “That’s why I sent the team out to look for the items,” Gurr, who was born in the United Kingdom and is married with two children, recalled.
It is this attention to detail that has made him successful. At Amazon China, his biggest achievement since taking over a year ago has been to “refocus the business” as a cross-border e-commerce site as well as helping Chinese brands gain global exposure.
“There are two parts,” he said in Beijing. “One is helping customers in China get access to the very best products around the world. The other is helping businesses in China become global brands through Amazon’s platforms.”
As the Chinese economy enters a slower but more sustainable growth phase, e-commerce will play a crucial role. This in turn will open up opportunities for global companies such as Amazon.
“We see a lot of opportunities in e-commerce, particularly cross-border e-commerce, as the Chinese economy moves from low-cost manufacturing to creating brands,” he said. “The new economic trend actually fits our agenda.”
Dressed in a plaid shirt and a pair of jeans, Gurr looks like a typical Chinese tech entrepreneur. But away from the office, he is very much the outdoorstype, having competed in 12 triathlons, which involve swimming, cycling and running.
Endurance and innovation are part of his makeup, and this came to the fore when he took over Amazon in China. Last November, the company made its first foray into crossborder e-commerce by launching its global store service.
By doing this, Chinese customers were able to buy goods directly from Amazon’s online shopping platforms from other countries. Then in August, when the company celebrated its 11th birthday in the market here, Gurr introduced a new concept, “Cross-border 2.0”.
The term describes Amazon China’s updated cross-border online shopping service, which includes faster delivery, a better experience for customers and a greater selection of overseas products for Internet consumers. Other major e-commerce players have been quick to follow, fueled by growing demand from the country’s affluent middle class.
“China will become the largest cross-border business-tocustomer, or B2C, market by 2020, with the transaction volume of imported goods purchased online reaching $245 billion,” a report released in June by global consulting firm Accenture and AliResearch, Alibaba Group Holding Ltd’s research division, said.
With those sort of numbers, China’s leading e-commerce companies Alibaba and JD.com Inc have been quick to roll out cross-border e-commerce services. Smaller Internet firms have also jumped on the bandwagon.
But Gurr is unfazed by the competition. He pointed out that Amazon runs 14 online shopping sites across the world and has the edge in cross-border e-commerce.
“If you are the largest player, if you have scale, people will come to you simply because you are the biggest,” he said. “But if you are not the largest, you have to do something that is different.
“It has to be something that only you can do. The thing we can do that is different is the relationship we have with hundreds of thousands of vendors around the world.”
To illustrate the point, he highlighted Amazon’s “relationship” with Manhattan Toy Co, a toy manufacturer based in the US.
“We are their biggest customer in the US, but they were not available in China,” Gurr said. “Then we worked to bring them here, initially through the Amazon Global Store service. Now through direct imports, Chinese customers can get products faster and cheaper.”
Enticing one foreign brand to China might not be a big deal, but attracting 36,000 labels to the country in six months underlines the pull of Amazon, Gurr added. “That is what we can do,”
Since Amazon China launched its cross-border e-commerce service, there are now more than 3 million different overseas products available to shoppers on its site, an increase of 40 fold.
While the company declined to reveal revenue figures for its
China
president of Amazon President of Amazon China
Leeds, England, United Kingdom Education
Career
Stores Ltd
Doug Gurr
Born:
1983-1986: 1986-1987: 1987-1990:
Bachelor degree in mathematics from University of Cambridge, England, UK Master degree in mathematics from University of Cambridge, England, UK PhD in Theoretical computing, University of Edinburgh, Scotland, UK
September 2014 to present: December 2011-August 2014: 2006-December 2011:
President of Amazon China
Vice-president of hardlines at Amazon.co.uk, the company’s UK division Senior executive and board member at Wal-Mart Stores Inc’s UK operation, Asda
CEO and founder of Internet startup Blueheath Partner with McKinsey & Co, a multinational management consulting firm in the US
April 2001-July 2006: 1995-2001:
business here, the company did report that orders from Chinese customers hungry for high-quality foreign products topped 5 million during the past nine months.
But then, Amazon China has a solid infrastructure system. Employing 5,000 staff and based in Beijing, the online giant has 13 centers scattered across major cities in the country that deal with quality control issues, shipping and delivery services.
Still, data from iResearch Consulting Group, a market research and consulting firm, showed that the company accounted for just 1.1 percent of China’s B2C market in terms of revenue in the first quarter of this year. During the same period in 2014, the figure was 2.1 percent.
“I am genuinely not worried because we are not chasing market share,” Gurr said. “We have no problems at all saying the business isn’t working ... we will simply move to other businesses. In the areas we genuinely want to play, we will see triple digit growth.”
This style of management will be key to the company’s success although there will be challenges ahead. One is the length of time it takes to make a decision here. “Sometimes, you just need to make one and move on,” Gurr said.
Indeed, under his management, Amazon China’s global sales business has taken off and it will expand even further after clinching deals to bring more US labels here, such as Rebacca Minkoff handbags and Enfagrow baby products. “This will ensure Chinese customers can buy authentic overseas products that are delivered to their doors,” he said.
Understanding what customers want is crucial in this market, so Gurr is improving his Mandarin. Yet, he does not believe there is a great deal of difference between online shoppers here and those in Western countries.
“They care about getting the products they want at fair prices,” he said. “They are all looking for a good shopping experience. Those things don’t really change.”
As for the future, Gurr does not see Amazon China becoming a totally localized version of the parent company here.
“I think for our organization, if you launch a purely local version, you can move fast, but you will throw away your advantages in scale and technology,” he said. “It would be a mistake for us to run a completely isolated business in China.”