Industry analysts are saying that Amazon seems to be preparing for its business expansion in the country, because the company has recently posted marketing and public relations jobs for its Korean business. Currently, the US-based electronic commerce giant is providing IT services for local companies, namely Amazon Web Services (AWS), that include cloud, analysis, and application distribution. Local content companies and online games developers are using AWS.
So far, the global company has assigned local PR work to marketing and public relations specialists. Thus, Amazon’s recruiting efforts can be interpreted as its intention to expand its business in the nation. Some in the industry even think that the firm’s recent move is aimed at bringing in the rest of its business areas, including retail.
However, many believe that the possibility of Amazon’s entry into the local retail sector is very slim, unless problems related to distribution and its one-click payment method are addressed all together. Amazon’s 1-Click payment system automatically charges any order to the default payment method on a user’s account and shipped to the default address at the click of a mouse.
The problem is that it is impossible for online retailers to store customer credit card information in Korea. On top of that, it is mandatory to use an authentication certificate for any payment over 300,000 won (US$279.58).
In addition, the industry thinks that Amazon’s expansion into the local retail industry will be difficult, unless the firm has a logistics team or system. Since its logistics system itself is a competitive advantage in its business, the company is not expected to use a local logistics company.
An industry source pointed out, “Even if Amazon expands its business in the country, it will be extremely difficult to start a retail business due to strict regulations related to online payments.” The source concluded by saying, “So, the company is more likely to expand its web services first, or to try less-regulated areas such as digital content.”