PEST ANALYSIS OF AMAZON
Since the internationalization of Chinese economy to now, China has become the world’s second largest economy by nominal GDP. However, the best measure for comparing output across countries is the GDP by purchasing power parity since China’s exchange rate is determined not by market forces.
What’s more, over the past 30 years, China has an average growth rate of 10% per year, which indicates that it is the fastest growing major economy. In this context, we are going to analyze the political, economical, socio-cultural and technological issues of Amazon, which is called PEST analysis. It’s a simple business measurement tool but important and widely used that helps understanding the market growth.
Political point of view
Amazon arrived in China in 2004. Implementing itself in China was not a simple task to do. Even if the firm was number one in all the countries it was already implanted in (the US, the UK, France, Germany, Canada, Japan), Amazon had to follow a certain kind of rules imposed by Beijing Government.
In order to find it place in the Chinese Market, Amazon had to submit to the control of the goods that are sold in the Chinese territory. Knowing that the censorship is very present in China, every single fluctuation of goods is monitored. It is the same case, for example in Germany, where the neo-Nazi books are banned from sale (prohibited by the government).
On August 2013, a new policy has been implanted by the Chinese government in order to support the development of cross border e-commerce, and therefore introduced six new measures concerning customs clearance, quarantine inspections, taxes and exchange rate.
Also, on August 2014, Amazon has signed a memorandum of agreement with the authorities of the Free Zone oh Shanghai. Under the agreement, from the fourth quarter of the year, Chinese Internet users can make purchases on Amazon at prices much lower than before. This new method allows the Chinese to greatly reduce the cost of
What’s more, over the past 30 years, China has an average growth rate of 10% per year, which indicates that it is the fastest growing major economy. In this context, we are going to analyze the political, economical, socio-cultural and technological issues of Amazon, which is called PEST analysis. It’s a simple business measurement tool but important and widely used that helps understanding the market growth.
Political point of view
Amazon arrived in China in 2004. Implementing itself in China was not a simple task to do. Even if the firm was number one in all the countries it was already implanted in (the US, the UK, France, Germany, Canada, Japan), Amazon had to follow a certain kind of rules imposed by Beijing Government.
In order to find it place in the Chinese Market, Amazon had to submit to the control of the goods that are sold in the Chinese territory. Knowing that the censorship is very present in China, every single fluctuation of goods is monitored. It is the same case, for example in Germany, where the neo-Nazi books are banned from sale (prohibited by the government).
On August 2013, a new policy has been implanted by the Chinese government in order to support the development of cross border e-commerce, and therefore introduced six new measures concerning customs clearance, quarantine inspections, taxes and exchange rate.
Also, on August 2014, Amazon has signed a memorandum of agreement with the authorities of the Free Zone oh Shanghai. Under the agreement, from the fourth quarter of the year, Chinese Internet users can make purchases on Amazon at prices much lower than before. This new method allows the Chinese to greatly reduce the cost of