There’s No Global Shopping Mall

Many apps that Americans use are also popular across the world, at least outside China. Facebook, WhatsApp, Google and YouTube, TikTok, Uber and Netflix are shared global experiences.

But shopping online or in stores has remained mostly local. People around the world don’t all buy teakettles and T-shirts from a shared big retailer like Amazon or China’s Alibaba, and we may never do so.

What does it mean for us if there are never shared shopping malls for the world? It might be healthy for the Earth to avoid becoming a homogeneous blob with a handful of global stores. But it also feels like a challenge to the idealistic notion that the internet can bring the world closer.

Several years ago, Amazon’s top financial executive told investors that over time, “customers behave the same globally.” So far, that prediction hasn’t panned out. Amazon’s financial disclosures show that nearly 90 percent of its yearly revenue comes from just four countries — the U.S., Germany, the United Kingdom and Japan.

About 30 years into Walmart’s effort to span the globe, the retailer has been successful in Canada, Mexico and Central America but not so much elsewhere. E-commerce stars like Alibaba, Coupang in South Korea and MercadoLibre in Latin America have so far taken off mostly in their home countries or regions alone.

There are globally popular shopping brands like H&M and Ikea, and packaged products from Procter & Gamble. But mostly, mass market retailers that sell many types of products like Amazon and Walmart have defied the digital principle that once an app or business strategy works in one place, it can go big everywhere.

“Retail is just hard to globalize,” Sucharita Kodali, a retail analyst with the research firm Forrester, told me. “It’s bothered me for years and I’ve tried to get to the bottom of it. I don’t know that there is a single answer.”

Kodali suggested three explanations for why retail powerhouses have difficulty becoming as global as app superstars. Retail stores in many countries are subject to government rules that tend to favor locals. Local retailers and e-commerce companies also have expertise to tailor the shopping experience to their home countries. And finally, Kodali said that because it doesn’t take billions of dollars to open a store, there is often lots of retail competition, which makes it harder for a superstar from another country to break in.

India, considered one of the biggest gold mines for the future of shopping, might be the best place to see the sweat of international retailers struggling to spread.

In 2014, Amazon’s founder, Jeff Bezos, made a highly publicized trip to India and declared that the country would be the focus of the company’s international expansion. A few years later, Walmart took over the Indian e-commerce company Flipkart. Alibaba has tried e-commerce in India, too.

The companies don’t give many financial details about how they’re doing in India. By most accounts, Amazon has made significant progress but has also had major setbacks. Recently, Amazon was outmaneuvered in an ugly legal fight after one of India’s major corporations, Reliance Industries, took over a big retail chain. It was a sign of the uphill battle for aspiring global retail powers there.

Digital-only companies like Facebook’s parent company, Meta, Twitter and TikTok have run up against complex regulations and tough local competition in India, too. But the country is the biggest market for users of Facebook and YouTube. Amazon and Walmart can’t say that. Until the past year or so, Amazon’s retail sales in North America were often growing faster than its sales outside its home market.

Before I spoke to Kodali, I had thought that Amazon had unique difficulties in translating a blueprint that had been spectacularly successful in a few countries to the rest of the world. But she persuaded me that this isn’t Amazon’s problem alone.

The flip side of the difficulty in making retailers that span the globe is that it creates breathing room for country-specific or regional power players to outmuscle giants. Coupang, Jumia in parts of Africa and Carrefour in France have more chances to thrive and deliver tailored shopping experiences for locals.

It may be a good thing for the world if shopping doesn’t become as globe-trotting as the rest of technology.

For more on Amazon: Check out Bloomberg’s ongoing podcast series that digs into Amazon’s past and present. (You can listen on Apple Podcasts or wherever you listen to podcasts.)

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