00:00Jeffrey Tusson is managing partner at Tecmo Consulting.
00:05I think Amazon has been sort of top of the hill for way too long.
00:11They haven't had a real competitor in a long time.
00:14And honestly, the Chinese market is more competitive and honestly, it's better.
00:19So, yeah, this is a top tier player coming out of the world's hardest market in this area.
00:25I think that's going to be a challenge for Amazon.
00:28I think it's going to be great for consumers.
00:30The Joybuy's launch is pretty ambitious.
00:33Six countries all at once.
00:34How risky is that scale of expansion?
00:40Yeah, it's any time you enter a new market.
00:43I've spent years doing this myself.
00:46Every new market and a new geography, a new country, that's it's difficult.
00:50I mean, it's a special skill.
00:52Most companies can't do it.
00:53And when you do do it, you struggle.
00:56That's the nature of the process.
00:58So when I see them taking a big step, like going into six markets with their marketplace, the amount of
01:05money they've spent doing acquisitions and attempted acquisitions, that to me looks like they're here in a major way.
01:14This is not a trial balloon.
01:16This is not let's take some small steps and see how it goes.
01:18And that's good, because to win in a major foreign market, you really have to be committed.
01:25JD.com's edge is logistics.
01:27How difficult would it be to translate that into Europe's more, let's face it, complex and highly regulated space?
01:37Yeah, what's interesting about JD is what they're building in Europe, what we've known in the last couple of months,
01:44especially with these announcements, it looks a lot like their playbook for China.
01:48And that's kind of a couple of things.
01:51Number one is they go for smart logistics at scale, which build more warehouses than the other competitors, spend more
01:59on tech, make them smart and efficient.
02:02And when you get that to a certain density and you get that to a certain volume, you begin to
02:06you begin to offer things to customers that your competitor just can't match.
02:11And we've already seen them do that once, which is their new if you buy by 11 in the morning,
02:17you get it by 11 that night.
02:19Now, Amazon does that for prime members, but they don't make it standard for everyone.
02:24And unless you've spent a lot of money and you have real depth in logistics and the tech associated, you
02:31can't make that promise reliably.
02:33So you'll see them start to pull levers in logistics and do things that competitors just can't do.
02:40Let's talk about what is really driving this push into Europe.
02:45Is it long term growth competition or is it a sign of slowing growth at home?
02:54It's probably both.
02:56It's JD has been very domestic relative to, say, Alibaba.
03:01Even Pinduoduo, they launched Timu.
03:03So, you know, they've been really domestic focused.
03:05They did a couple retail facing businesses in Indonesia and Thailand, which they sort of as joint venture.
03:12They were sort of half measures.
03:14This is the first consumer facing major push we've seen from them.
03:19Their logistics business, their B2B service side, that has been global for several years now, seriously.
03:26But as a retailer, and that's what they're launching in Europe, six markets.
03:30They're a third party marketplace and they're a first party retailer.
03:35So virtually every digital China company I deal with, and I deal with almost pretty much all of them, every
03:41single one says they're going international.
03:44That's just been the playbook for all of digital China over the last three to four years.
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