There is no world mall
Many apps used by Americans 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 online or in-store purchases remained mostly local. People around the world don’t all buy kettles and t-shirts from a big shared retailer like Amazon or Alibaba in China, and we may never do that.
What does it mean for us if there are never shared malls in the world? It might be healthy for Earth to avoid becoming a homogeneous mass with a handful of global stores. But it also feels like a challenge to the idealistic notion that the internet can bring the world together.
Several years ago, Amazon’s top chief financial officer told investors that over time, “customers behave the same way around the world.” So far, this prediction has not materialized. Amazon’s financial information shows that nearly 90% of its annual revenue comes from just four countries: the United States, Germany, the United Kingdom and Japan.
Some 30 years into Walmart’s efforts to span the globe, the retailer has had success in Canada, Mexico and Central America, but not so much elsewhere. So far, e-commerce stars like Alibaba, Coupang in South Korea and MercadoLibre in Latin America have taken off mostly in their home country or region.
There are world famous brand names like H&M and Ikea, as well as packaged goods from Procter & Gamble. But for the most part, mass-market retailers that sell many types of products like Amazon and Walmart have challenged the digital principle that once an app or business strategy works in one place, it can become important everywhere. .
“Retail is just hard to globalize,” Sucharita Kodali, retail analyst at research firm Forrester, told me. “It bothered me for years and I tried to get to the bottom of it. I don’t know if there is one answer.
Kodali suggested three explanations for why retail giants are struggling to become as global as app superstars. Retail stores in many countries are subject to government rules that tend to favor locals. Local retailers and e-commerce companies also have the expertise to tailor the shopping experience to their home country. And finally, Kodali said that since it doesn’t take billions of dollars to open a store, there’s often a lot of competition in the retail business, which makes it more difficult for a superstar to enter from a other country.
India, considered one of the biggest goldmines for the future of shopping, might be the best place to see the sweat of international retailers struggling to spill out.
In 2014, Amazon founder Jeff Bezos took a high-profile trip to India and said the country would be the center of the company’s international expansion. A few years later, Walmart took over the Indian e-commerce company Flipkart. Alibaba has also tried e-commerce in India.
The companies do not give many financial details about their situation in India. By most accounts, Amazon has made significant progress, but also experienced major setbacks. Recently, Amazon was sidetracked in an ugly legal battle after one of India’s leading companies, Reliance Industries, took over a major retail chain. It was a sign of the uphill battle for budding global retail powerhouses.
Digital-only businesses like Facebook’s parent company Meta, Twitter and TikTok have also faced complex regulations and stiff local competition in India. But the country is the biggest market for users of Facebook and YouTube. Amazon and Walmart can’t say that. Until last year, Amazon’s retail sales in North America often grew faster than its sales outside its home market.
Before speaking to Kodali, I had thought that Amazon had unique difficulties in translating a plan that had been spectacularly successful in a few countries to the rest of the world. But she persuaded me that this is not Amazon’s only problem.
The flip side of having difficulty making retailers span the globe is that it creates leeway for country- or region-specific power players to outsmart the behemoths. Coupang, Jumia in parts of Africa and Carrefour in France are more likely to thrive and provide tailored shopping experiences for locals.
It might be a good thing for the world if shopping didn’t become as global as the rest of technology.
For more on Amazon: see Bloomberg ongoing podcast series that delves into Amazon’s past and present. (You can listen to Apple podcast or wherever you listen to podcasts.)
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Does this dog howl “kazoo?” Or what? (Thanks to the famous Twitter @darth for sharing this one.)
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