How Can Amazon Surpass WAL-MART, A Century Old Shop?

As the largest traditional retailer in the world, relying on its strong supply chain information technology and offline, it has been developing in the international market for more than 54 years.

In the eyes of Chinese people, it can be called a century old shop.

However, in recent years,

In the case of traditional enterprises that have been pushed down by waves, WAL-MART has been mentioned by many market analysts and investment companies, and even some commentators have pointed out that WAL-MART will become

What is the biggest victim of the times?

For a long time, no one would question WAL-MART as a leader in technology, but many retailers today have the information technology that they can match.

After entering the twenty-first Century, I heard little about WAL-MART's technological innovation, and when people talked about the latest technology in the retail industry, the first thing that came to mind was electronic commerce. Amazon retailers such as Amazon have become leaders in technological innovation.

In the US, WAL-MART fought with Amazon ten years ago.

But until 2009, WAL-MART also ignored Amazon because only 1/4's target customers procured on Amazon.

But now, more and more cheap old customers and young people who are familiar with the Internet are turning to Amazon.

For a long time, many technology companies regard market value exceeding WAL-MART as an important milestone.

In July 2015, Amazon officially surpassed the traditional retail retailer WAL-MART in terms of market value.

For the entire electricity supplier industry, this is undoubtedly a landmark moment, because Amazon officially surpassed the traditional retail giant WAL-MART in its market value, symbolizing that the largest online retailer has finally turned the biggest retail chain store from the market value to the ground.

With the intensification of competition, the boundaries between online and offline are blurred. The collision between Amazon and WAL-MART is becoming more and more intense, and there will be more and more conflicts.

We will not only see all kinds of electricity supplier technology, application and marketing innovation are rapidly put into the battlefield in order to expand each other's advantages, but also to see how online and offline in this comparison of strength, how to change and merge.

We need to ask why Amazon is so successful.

Seize the core and build a series of supportive businesses.

Contrary to WAL-MART's strategy of taking offline as the main business and supplemented by electric business strategy, Amazon has always highlighted the expansion strategy based on online and supported by storage center.

Finally, the essence of business is to win market scale and achieve profits.

In fact, WAL-MART is also making efforts in e-commerce.

Market data show that WAL-MART is now the third largest Internet retailer after Amazon and Apple Corp.

However, because WAL-MART started late on e-commerce, it set up WalmartLabs at the end of 2010, and attracted a large number of technical engineering talents to focus on the development of the electricity supplier. In addition, WAL-MART is in a passive chase situation. The development of the entire electricity supplier is being built. It takes some time to adjust and optimize the logistics delivery system so as to meet the standard of service for the electricity supplier business.

At the same time, unlike the public in the eyes of pure electric business impression, Amazon is actually a very cattle logistics company.

In 2012, the acquisition of KivaSystems for us $775 million greatly improved the efficiency of Amazon's logistics system.

The efficiency of the Kiva system is 2-4 times higher than that of the traditional logistics operation. The robot can run 30 miles an hour with an accuracy rate of 99.99%.

This efficiency and technology have killed almost all of the logistics companies, including DHL, UPS, FedEx, which we know very well.

On the other hand, Amazon's own logistics system has been built up over the past 10 years, not only to provide fast and convenient logistics services to Amazon's own orders, but also become a support business that can provide profit and hope for Amazon to provide logistics and warehousing services to three party sellers.

You know, so far, in any other global electricity supplier, retail business is good, self built logistics is a "burn" and "cost", but "no money" business segment.

A forward-looking business vision

Amazon began to set foot in e-commerce in the early 1995, but e-commerce is still in its infancy as a new thing. In the eyes of many people, e-commerce is still a new thing that can not be figured out in the future.

Amazon is taking advantage of the neglect of most traditional retailers to take the lead in building a scale and platform.

Then, when everyone was busy with platform building, a global logistics system was gradually established to serve Amazon's main business.

Open and flexible business structure

Amazon's e-commerce development strategy embodies the advanced modular design idea. It has relatively independent, general and interchangeable characteristics in all parts, and has the characteristics of openness, integration and flexibility.

It is particularly worth mentioning that whenever a new e-commerce hotspot occurs, Amazon can integrate it into its own system, for example, the introduction of three party platform sellers, welcoming global sellers, Amazon logistics and so on.

Unique business strategy

Brant, author of the rise of Bezos and Amazon website, has pointed out that Amazon enjoys the favor of investors. This is a rare phenomenon, because Bezos's long-term habit is to run the company on a deficit basis.

Brant said: "he has made it clear that he does not focus on quarterly earnings, which is different from the operating philosophy of all listed companies. Bezos will maintain this mode of operation for a long time, will reinvest profits, continue to grow and expand, and continue to attract consumers through low prices. These strategic initiatives of Bezos have worked."

This is the famous Amazon flywheel theory.

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Developing new high-tech territory

At present, Amazon is not a simple online retailer, but a high-tech company. The most noteworthy thing is Amazon's cloud computing business.

No one would have thought that Amazon, a retail service provider, will put the main force on cloud computing. At present, Amazon's cloud computing business is no less inferior to Microsoft, IBM and other technology giants.

At the same time, Amazon's powerful cloud computing capability can directly help its core business and optimize its warehousing and distribution business, thus providing important data support for Amazon's long-term sustainable development.

To Amazon's confidences

Although in the past few years, Amazon has been giving a strong blow to WAL-MART, whether from momentum or sales volume, in the field of electricity supplier, directly or indirectly forcing WAL-MART to carry out a series of strategic pformation.

As an Internet leader, Amazon has contacted more new customers by occupying computers and smartphones, far outnumbered by traditional companies that focus their energies on real estate or inventory products.

E-commerce has reduced some "hard cost" and "soft cost", and Amazon has fully cloned WAL-MART's excellent logistics management.

Therefore, Amazon surpassed WAL-MART, a century old shop, which is an inevitable and subversive result.

However, as a subversive, Amazon has no hardware in the retail sector.

This not only helped his rapid development, but also became a possible bottleneck for further development in the future.

"Low price" is indeed the core factor driving consumers to pfer the shopping platform.

In the US, consumers are almost convinced that choosing Amazon shopping can save at least 5% of the cost of WAL-MART.

However, under the pressure of the fair competition alliance led by WAL-MART, Amazon's advantage is fading away, and the online retailers' exemption from consumption tax policy in the US states is about to be changed.

At present, the final compromise between Amazon and the US state governments is to provide jobs for the states through new warehouses and logistics centers, thereby postpone the collection of consumption tax.

So, Amazon and WAL-MART will face more pressure and uncertainty when they fight in the US, which will directly affect his continued competition with WAL-MART.

To WAL-MART's confidences

From the perspective of a consumer and a user, a ruined enterprise is stepping on its feet. Now the Internet age is changing rapidly. If we do not pform in time and keep pace with the times, then big enterprises will be on the verge of bankruptcy.

And those companies that serve the public should constantly improve themselves from the perspective of users, because the needs of users are constantly changing, and no company can do it once and for all.

If a retail market can not see the fundamental changes in the Internet and the Internet of things, it will be very fatal.

True competitors often come from industrial pformation, and Amazon is such a subversive.

WAL-MART's e-commerce is actually good, selling all the customers to the unexpected, and then picking up the store.

To facilitate customers is the first step for WAL-MART to establish e-commerce.

In fact, WAL-MART is mainly bulk shopping. Rather than developing unfamiliar electronic commerce, it is better to develop group shopping that is familiar to itself, and to defend its own field is more important than opening up territory.

On the other hand, the electricity supplier is a trend. It can also say that some people's lifestyle has been changed, but it is not like some people say that "no e-commerce, there will be no business in the future".

The development of electronic commerce has a congenital deficiency compared with China.

Logistics is a very important link in the electricity supplier chain. The rapid development of China's e-commerce relies on China's extremely low logistics cost. China's urbanization process makes the population live very densely, which is also a very important reason for the low logistics cost in China.

In the United States, it is already a process of counter urbanization. The population is very dispersed, which brings great inconvenience and difficulty to the distribution of the electricity supplier. WAL-MART's supermarket is basically in the rush of the high speed road. People within 10-20 kilometers can drive for 1-2 weeks for centralized purchase, which is undoubtedly more economical than the special distribution of the electricity supplier. This kind of hypermarket is really more suitable for the American way of life.

Amazon's representative business model has supplemented the mainstream shopping practices in the US. Unless the US logistics costs have undergone fundamental changes, Amazon will not be able to completely replace WAL-MART in the US mainland.

Moreover, WAL-MART's electricity business started at the end of 2010, but it looks pretty good from the perspective of growth.

From the following official materials, WAL-MART focuses on product optimization and offline integration.

As a traditional offline retailer, WAL-MART's online pformation is excellent. Its business growth is second only to Amazon and eBay. This is mainly due to customer's offline recognition and strong product supply chain built in the past 50 years.

In addition, the prospect of "crowdsourcing express" launched by WAL-MART is good for me, mainly because the cost of the last mile distribution of us single ticket goods is relatively high.

Only by reducing the cost of logistics and improving the efficiency of logistics can electricity business get better development.

Finally, online WAL-MART expansion can have huge advantages according to the local supermarket.

It might have an advantage over Amazon.

But no one can predict the effect.

It is hoped that the quarrel between Amazon and WAL-MART will not lead to the funny ending of "snipe fight, fishing advantage".