How far can Amazon reach?


You may think of as a global marketer, but in reality it is very difficult to sell products in more than one country, even online. But Amazon is expanding, with its latest launch in Spain – the ninth country where it is doing business.

The online marketing giant plans to enter Spain in a big way, offering books, music, and DVDs, as well as electronics and watches.

According to analyst Anthony DiClemente at Barclays Capital, Amazon is offering its Prime service with an aggressive price of 14.95 Euros and 2-3 day delivery. This is significantly less than the $79 in the US, 49 Euros in France, and 29 Euros in Germany, although more expensive than the 9.99 Euros offered with the launch of Amazon in Italy.

“We believe the launch ahead of the holidays and relatively attractive Prime pricing could help build early adoption and loyalty,” DiClemente told clients in an analysis piece.

Not that Amazon will find a market vacuum in Spain.

eMarketer estimates that the Spanish eCommerce market is the 4th largest in Europe (after the UK, Germany, and France) at $15B in 2011 (estimated) and growing to $26.4B by 2015 (estimated) resulting in the second fastest growing market in Western Europe with a 16.5% 5-year CAGR in 2010-15, second only to Italy. As a result, Amazon will possess stand-alone sites in the five largest eCommerce markets in Europe, the analyst noted.

“We believe the launch of Spain could add some revenue upside in Q4 2011 and 2012 based on the benefits of the localized country site and aggressive Prime pricing. However, new country sites often take a year or two to become profitable, and Amazon is still working through the launch of Italy not quite one year ago,” DiClemente concluded.

RBR-TVBR observation: Creators of content are very attentive to the growth of multi-national online marketers as pipelines to sell their wares around the globe. Another plus is that ready availability of genuine CDs, DVDs, books and other media products at competitive prices helps deter piracy.