Amazon Makes Japanese Debut

Hoping to crack the lucrative Asian e-commerce market, Amazon.com launched a Japanese-language site Wednesday focused on its core business of selling books.

The Seattle, Washington-based e-tail giant said Japan already represents Amazon’s largest export market, with nearly 200,000 Japanese customers ordering $34 million (US$) in products each year from the primary site.

According to founder and CEO Jeff Bezos, the Japanese site makes the most of the experience Amazon has gained selling products in “the second-largest market in the world.”

The Japanese-language site is Amazon’s fourth international effort, following sites in France, Germany and the United Kingdom.

Early Launch

The Japanese launch comes several months ahead of schedule, something the company attributes in part to its software partner, Basis Technology Corp., which handled language-translation and site design issues.

Rolling the site out before the upcoming holidays might pay off for Amazon, as the Gartner Group recently predicted that Japanese consumers will spend $1.3 billion online during the holiday season.

Amazon has said it expects to rake in $1 billion in total sales this holiday season.

Attention on Asia

The move comes as other U.S. companies have seen fit to target Japanese Net shoppers. According to Emarketer, Japan will have 77 million Internet users by 2005.

Andersen Consulting, meanwhile, said recently that e-commerce in Japan grew at a rate of 400 percent from 1998 to 1999 — leading U.S. e-tailers to hope for the type of hyper-growth that marked the early days of e-commerce in North America.

Challenge to Bertelsmann

Amazon’s site will be backed up by a corporate office in Tokyo — reportedly located in the same building as Bertelsmann AG’s BOL, the leading Japanese e-commerce site — as well as a distribution center in Ichikawa, Chiba and a customer service center in Sapporo, Hokkaido.

Bertelsmann is a major shareholder in Barnesandnoble.com, Amazon’s major U.S. competitor.

Amazon will also face competition from Japan’s largest convenience store chain, Seven Eleven Japan Co. Ltd, which has launched an Internet bookstore of its own.

Analysts say Amazon must overcome Japanese publishing regulations that make it impossible for the e-tailer to offer substantial discounts on the 1.1 million Japanese language books in the site’s catalog. Amazon will, however, continue to discount the 600,000 English-language titles in its inventory by up to 30 percent.

In an attempt to attract customers quickly, Amazon will offer free delivery for the rest of the year.

Lingering Questions

Larger questions remain about Amazon’s long-term profitability. Although the company recently outpaced Wall Street projections in its third quarter earnings report and saw an increase in its net sales, the Internet bellwether — which continues to diversify its product offerings — has been dogged by doubts that its expanding business model will prove viable.

Amazon said it plans to sell additional products on its Japanese site over time, most likely starting with CDs and movies.