Amazon Set To Develop Global Delivery Network

It isn't hard to see that Amazon is taking online retail to the next level. Online shopping is expected to grow to $500 billion by 2018, which attests to why the retailer is being very aggressive in its' growth investments as well. Now, the company is moving beyond just being established in the US, but globally.

A recent report from Internet Retailer via Bloomberg News is showing that one of the key markets that Amazon is diving into is China. The largest online retail player in China is Alibaba, which Amazon is planning to develop a global delivery network to compete against it. AliResearch, Alibaba's research company, has forecasted that the market in China is expected to reach $1 trillion in e-commerce by 2020, meeting the demand of 900 million shoppers. It's no coincidence that Amazon is planning a big move there.

Internet Retailer discussed how within Amazon's 2013 report regarding fulfillment, the vast global delivery network that it will create there will control the flow of goods from factories in China and India, to customer doorsteps in Atlanta, New York and London. Amazon launched Same-Day Delivery in Atlanta last year. A month ago, the retail leader made greater acquisitions in the UK, acquiring more of French delivery company Colis Prive. Amazon already owned 25% of the company and there probably will gain more. In 2014, Amazon also acquired 4.2% of UK delivery company Yodel. Not to mention that online retail is on the rise in Great Britain as well.

With Amazon's innovation to engage in possessing a global delivery network, it will automatically put the e-retailer in direct competition with FedEx and UPS. The article stated that Amazon's global supply chain will put it at the center of a logistics industry that involves not just shippers like big carriers, but also other middlemen who handle cargo and paperwork associated with transnational trade. Amazon's new supply chain will cause the company to bypass these brokers, amassing inventory from thousands of merchants around the world and then buying space on trucks, planes, and ships at reduced rates.

Merchants will be able to book cargo space online or via mobile devices, creating what Amazon described as a “one click-ship for seamless international trade and shipping.” The 2013 report ultimately stated that “Sellers will no longer book with DHL, UPS or Fedex but will book directly with Amazon. The ease and transparency of this disintermediation will be revolutionary and sellers will flock to FBA given the competitive pricing.”

With a global delivery network in grasp of Amazon, more than likely, getting shoppers their online order fast will be next. The retailer has implemented same-day delivery for Prime members in strategic major US cities. Amazon same-day delivery in the San Francisco Bay Area, Seattle-Tacoma, Dallas-Fort Worth, San Diego, Indianapolis, New York, Philadelphia, Baltimore, Boston, Phoenix, Washington DC, Tampa Bay, and Atlanta. This is an option that has set the bar high, coupled with Amazon's effective order fulfillment center logistics. Amazon even launched free same-day delivery last year in 14 metropolitan cities the US, beginning with California cities.

Same-day delivery is going to increase right along with e-commerce, not only within the retail industry, but in other industries as well. The service is forecasted to reach $987 million by 2019 and top retailers like Amazon will be the core drivers of expanding the service. Retailers and brick-and-mortar stores will partner with a Same-Day Courier like A-1 Express to take advantage of the convenience demand by shoppers with the boom online. The New York Courier is a viable option for fast delivery implementation in major US cities nationwide.

Reference: 2.9.16, www.internetretailer.com, Bloomberg News, Amazon eyes Alibaba as it builds a global delivery network