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Giant retailer Amazon.Co.Jp shows continued sales growth. Wonder under business downturn

6, 10. 2009

   The sales expansion on the internet retailing site, Amazon.Co.Jp is unceasing. Just in the past two months, the company newly established the sales categories of "Stationery and Official Supplies," "Jewelry" and "Astronomy," and the number of items handled has already exceeded 10 million. The site is now classified as a gigantic retailing place. The company will set up a new distribution base for the first time in western Japan in early August 2009, aiming at shortening of delivery time and higher efficiency.

"We offer the widest variety of selections on the globe"

   About 78,000 items of office supplies, furniture for office and illuminators are handled initially at the "Stationery and Office Supplies Store," which was opened on May 27, 2009. The company also opened the "Jewelry Store" on April 2, 2009, to sell about 30,000 different items. On the same date, it opened the "Astronomy Store," offering about 15,000 items of astronomical telescopes, eclipse glass and other products related to the astrology. The Astronomy Store conducted a special event in connection with the total solar eclipse that will be observed in some areas in Japan on July 22, 2009, showing the company's stance to responding to current occurrences.

   The person in charge of public affairs at Amazon, Japan, which operates the Amazon retailing site, said that any kind of products will be made available in the future as long as there are needs for them on the "global vision" of the Amazon group: "We offer the widest variety of selections on the globe."

   "We will continue to increase the categories without stopping in the present condition. About books, appliances, toys and other categories we already have available, we will also expand the variety of the products," he also said.

   The number of items of the products Amazon is currently handling has already exceeded 10 million.

   However, there are products that are handled by the parent company Amazon.Co of America but not offered by Amazon of Japan. Amazon.com, for example, has the "digital download" category in which digital contents, such as "video on demand" and "MP3 download," are sold. Amazon of Japan does not yet offer such service. The person in charge at the Japanese company stressed his company's way of management by saying:

"We don't increase our categories by following what is going on in America. In Japan, there is the Japanese market, we will expand the selection of items to meet the needs of the users in Japan."

Profitability far better than other retailers

   Efforts are also being made to shorten the period of time required for deliveries for better distribution of goods. The company that handles the distribution for Amazon, Amazon Japan Logistics, plans to launch a new distribution base tentatively named "Amazon Sakai FC" in August 2009. The FC stands for "fulfillment center" and will be used like a warehouse of Amazon. All items retailed by Amazon will be stored in and distributed from the FC. The Amazon Sakai FC will cover a total area of 67,923 square meters, larger than the areas covered by similar facilities already in operation of 62,300 square meters of Amazon Ichikawa FC and 34,145 square meters of Amazon Yachiyo FC. The projected FC will be a huge distribution center to be established for the first time in western Japan.

   The new FC will make it possible to deliver goods ordered by the customers in the Kansai and other areas in western Japan within the same day of ordering in some cases, while the deliveries are currently made on the following day at earliest. The person in charge of public relations said:

"Keeping the efficiency on mind, we will maintain the quality of the products, and utmost efforts will be made at the same time to assure the customers of deliveries on time."

   According to the company conducting researches on the internet retailing and other distribution activities, Hitsuki Research & Consulting Co., Amazon maintained the two-digit on-year increase rates in its estimated sales of 45.5% to 160 billion yen in fiscal 2006, 37.5% to 220 billion yen in fiscal 207 and 18.2% to 260 billion yen in fiscal 2008. These are stunning figures amid the decreases suffered by most of super markets and department stores in their sales in the face of the economic downturn. About the undisclosed profitability of Amazon, the person in charge at the research company said, "The figure is thought to be far beyond those of other retail companies."

   "Its own high-level distribution operation is the reason behind the maintaining of the high profitability. Jewelry and astronomy goods that are newly put on sale are certain to be more expensive than books per item. If a system can be established to keep down the delivery cost of the new items to about the same level as that for books, it would be possible to heighten the profitability even higher," he said.

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