Online retailer Amazon.com announced yesterday its Japanese site had attracted one million shoppers in record time and would soon become its largest earner outside the US.
Amazon.co.jp also cemented its first partnership with British music shop Virgin MegaStore, which will use the Web site to host its own Internet shopping pages by the end of the year.
"The Japanese site, only 18 months after its launch, has one million customers which is a very remarkable result and is the fastest site in terms of achieving this," said Diego Piacentini, senior vice-president of worldwide retail and marketing at the US-based Internet giant.
"[It is because of] a combination of customer experience, price ... and selection," he told foreign reporters during a trip to Tokyo.
Japan will become Amazon's largest income maker outside the US "in the very foreseeable future," Piacentini said.
The parent company reported Tuesday a net loss of US$94 million for the second quarter to June, shrinking from a net loss of US$168 million in the same period a year ago.
But revenue grew 21 percent to US$806 million over the three months, with sales from Amazon's British, German, French and Japanese sites up 70 percent to US$218 million. The interactive retailer opened another site in Canada last month.
Amazon does not disclose financial figures for individual countries, but Piacentini said the Japan site was set to beat a sales target of US$100 million in 2002.
"We will go beyond that," he said, adding the Japanese unit should become profitable in less than three years after opening in November 2000, beating the German and British sites which both took 36 months.
Although Amazon plans to focus on improving services at its six global Internet malls -- which account for 92 percent of total e-commerce -- further expansion was definitely on the cards.
"Clearly we see the potential in countries like Korea or China but for the time being we will deal with those countries through exports, but clearly it is not a matter of if we want to do an expansion it is a matter of when and how," Piacentini said.
Amazon sells music and videos as well as books in Japan and aims to introduce consumer electronic goods which are already sold on its US and British Web pages.
The firm's business model, with low inventories and minimal capital investment requirements due to an absence of physical retail outlets, would make it "become a machine producing cash," said the executive.
Bricks and mortar stores pay through the roof for land to expand as real estate prices are increasing in the long term. Conversely e-commerce sites grow through new technology, which costs less and less, Piacentini said.
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