Amazon Opens Japanese Site

T O K Y O, Nov. 1, 2000 -- — Amazon.com, the ambitious numberone Internet retailer, unveiled its Japanese site Amazon.co.jp today in an aggressive push to crack open Japan’s cozy bookretailing market.

In its first retailing venture in Asia, Amazon will offer 1.7million titles on its Japanese language Web site, which is nearlyidentical to its U.S. version, but with the tabs for otherproduct lines such as videos, CDs, electronic goods, andgardening tools conspicuously absent.

Amazon.co.jp said it would expand its product line beyond its1.1 million Japanese titles and 600,000 English titles some timeover the next year.

“We’ll do the same kind of things we’ve done in the UnitedStates with electronics, tools, kitchenware and so on,” chiefexecutive Jeff Bezos told Reuters.

Fourth Venture Outside U.S.

The line up was likely to expand with media-based productssuch as CDs and videos coming first, said Amazon’s president inJapan, Junichi Hasegawa, in an interview.

Its fourth site outside the United States will try to tapinto Japan’s estimated 350 billion yen ($3.2 billion) market fore-commerce. In a recent survey of Japan’s Internet users, nearlyhalf said they wanted to buy books or magazines online.

“Amazon has a much more attractive Web site than otherJapanese online book stores and I think they’ll win a greateraudience with a ‘co.jp’ address,” said Masato Araki, analyst atWit Capital Japan.

Others said it would do well, but not remain unchallenged.

“It’s not going to be as easy as the United States,” saidLuigi Limentani, analyst at Nikko Salomon Smith Barney.

Gift-Giving Culture

Amazon said it is already the largest retailer by any measurein Japan, because of the 193,000 Japan-based customers alreadyshipping goods across the Pacific Ocean from the U.S. Web site.

Although Japanese titles cannot be discounted due to thecountry’s intricate book distribution system, Amazon said itwould offer a 30 percent discount on all English and foreignlanguage books and offer free delivery until the end of the year.

Diego Piacentini, Amazon’s vice president for internationaloperations, said it was likely that Amazon.co.jp would launch agift-service by the middle of 2001, in order to tap into Japan’sseasonal gift-giving culture.

Asked about the threat from competitors in Japan, Amazon’sBezos said: “The reason we have so many customers is that we haveconcentrated on the customer experience. But this is a big marketand there will be lots of room for our competitors.”

Big Retail Market

Isao Tanaka, chief executive of BOL Japan Ltd, told Reutershe welcomed Amazon’s entry into Japan.

“We’d like to say congratulations,” Tanaka said, adding amore vibrant e-retailing environment would mean more business forall online sellers.

BOL, the online unit of the German media group BertelsmannAG, operates outside the United States as an international onlineretailer, and owns 40 percent of Barnesandnoble.com Inc, Amazon’smain retailing competitor.

Tanaka was surprised about one thing though. Amazon, whichhad kept its activities under tight wraps, revealed its Japanheadquarters was in the same building as BOL Japan.

Business Concerns

The announcement comes as Amazon braces for the key U.S.holiday shopping season when the e-tailer expects to pull insales of $950 million to $1.05 billion.

Bezos repeated the mantra that Amazon was comfortable withits cash position and did not intend to change strategy to pleasecritics.

Amazon’s shares have rallied more than $17 or nearly 90percent since hitting a low for the year on Oct. 18, a reboundthat was bolstered by a strong quarterly earnings report.

But doubts have resurfaced recently over the health of theonline retailer, as analysts remain at odds over the amount offree cash that Amazon has at its disposal to fund operations.