Kurt Beidler, Vice President of Amazon China @ StoryDrive China
photo: C.Y.Schmidt

Amazon China: Change, Flexibility and Survival

In the morning of May 30th – the second day of the Story Drive China conference – Kurt Beidler, vice president at Amazon China, shared some of the global company's experiences in the ever cha(lle)nging Chinese market.

By Maja Linnemann on May 31, 2012

Few people would be better equipped to talk about “change” than Kurt Beidler, who witnessed many of the extraordinary changes China went through in the last 30 years. In 1987, Kurt Beidler was a regular highschool student in Pennsylvania when his father, a literature professor, took the whole family to China. After one year in the inland city of Chengdu, the ground was laid for a lasting interest in China’s language, philosophy, literature and culture and the direction for his career was set.

In the 1980s, most people outside China had very limited knowledge or interest in what was going on there. After returning from Chengdu, Kurt Beidler had to resort to research libraries of universities to find anything relevant on his you new subject of passion and had to travel to China again and again to stock up his own library in the US.

How times have changed! At the end of 2011, Amazon launched a “China Bookstore” on which provides tens of thousands of books published in China, including many books in English about China for US customers.

But how did Amazon thrive in China through flexibility and by taking the right choices in terms of localization?

Today, Amazon China offers 5 million unique items in 28 product categories including local and imported goods via it’s website The Chinese Amazon is one of nine local e-commerce platforms around the world the US company has established.

It may not be easy to define if Amazon is actually a retailer, a technology or media company, but as Kurt explained, the guiding principle of the business is clearly defined: “We focus on our customers.”

With all the cultural differences which obviously exist, Amazon’s research has shown, that customers around the world all care for these three things: selection, price, convenience.

So what does this mean for readers on the Chinese mainland?

In terms of selection, the first priority for Amazon is to offer a complete selection of books. Disappointed customers are to be avoided by all means. Today, Amazon China has the greatest selection of books among all bookstores in China. A cornerstone in achieving this objective is Amazon’s third party seller program which includes publishers, wholesalers and even bookstores, a strategy that at the beginning had been viewed by some as inviting your competitors in.

As to the second priority, Kurt Beidler pointed out that Amazon aims to offer consistently low prices to its customers. He also expressed optimism towards the willingness of Chinese customers to pay for digital content, even though the Kindle e-book reader is not available on the mainland yet.

The most interesting topic in terms of localization however, is the third priority of customers: convenience. “Here we look at every tiny detail of the interaction between the customer and us: Finding items in our catalogue, how you search and browse, payment options, shipping speed, product return options…….”

The two major challenges when entering the Chinese market in 2000 were the low usage of credit card usage and the national coverage of shipping and logistics partners was not as high as we were used to.

In order to solve the second challenge, Amazon had to adapt its established operation modus and for the first time built its own “last mile delivery service”. Now, a fleet of several thousand bicycle, motorcycle and van drivers are employed to provide same day delivery in 16 major cities on the mainland.

This decision also brought along a solution to the first problem: cash on delivery “the prepared method of payment of the Chinese customer” as Kurt explained was now possible. Other customer service improvements followed, such as allowing customers to check the goods before they have to pay, take unwanted goods back and save them time as well as allowing them to schedule the deliveries for the early evening hours, when they are at home.

So, what seemed as an obstacle in the first place, has given Amazon a face to face contact with its customers for the first time and opened up new opportunities for innovation.