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Amazon vs CDON, Allegro, &

Former VP, Amazon Logistics Europe

Why is this interview interesting?

  • How Amazon built out the warehouse infrastructure in France, Germany, UK and Poland
  • Difficulties in optimising for local language on the front end
  • How Amazon would work with vendors when entering a new country
  • Why Amazon don’t need to own infrastructure in the Netherlands
  • Impact of introducing FBA and Prime in a new region
  • Comparison of the attractiveness of the Nordics and Poland for Amazon
  • How Amazon could compete with Allegro and CDON

Executive Bio

Philippe Hemard

Former VP, Amazon Logistics Europe

Philippe has spent over 25 years developing end-to-end logistics systems from vendors to customers, including 18 years at He joined Amazon in France in 2000 as Distribution Centre General Manager, moving to (Scotland) in 2004, to support business growth within the UK. Philippe then took up several senior leadership positions in European Operations at Amazon EU Headquarters in Luxembourg, culminating in the role of VP Amazon Logistics Europe from 2015-18. Before joining Amazon, Philippe worked for Danzas (now DHL) in France. Throughout his career he has worked on network modelling, procurement and buying processes, inventory management, fulfillment management, and transportation network management. Since March 2018 Philippe has run his own consultancy business, holds several board positions and teaches Supply Chain Management and Global Logistics Strategy at university. Read more

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Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

Philippe, can you just provide some context to when you first joined Amazon and how you were looking at building out a European infrastructure, to deliver goods to consumers?

It is interesting that you mentioned about when I started building the European infrastructure because when I started, it was not European at all. Amazon was opening country by country, in Europe and elsewhere, because Japan opened at the same time as France. Amazon was still a startup when I joined the company in 2000, and it was only five years old. It had just opened in Germany and the UK in 1998, by acquisitions of a very small internet companies; a bookseller in both cases; they were very tiny. In France, it was the first time, outside of the US, that Amazon decided to go and build everything, with the website and the team.

As I said, at that time, it was not a European approach; it was a country-by-country approach. Therefore, Germany and the UK were really working on their own and there was a team that came to help and recruit and build a team in France. The Europeanization just started in 2001, a year later, where Amazon then had three countries in Europe and decided that they would start to create an organization around that and thinking about how to grow the three countries, together.

That’s the way it started, at least for me, by just having three countries first and then grouping them and getting them to start working together.

So strategically, Amazon actually entered the UK, France and Germany differently?

Yes. As I said, in Germany and the UK, they bought and acquired a small company that was selling books on the internet, but they were very small. From that, they very quickly rebranded as Amazon and they extended from that. At least in the UK, there was one person from the older company who is still at Amazon now. They kept most of the people, at the time, and grew from there. In France, they looked to see if they could do the same, but there was no suitable candidate. So in France, they did what they had only done in the US before, which was build everything from scratch. The catalogue, the logistics team – I was hired as head of logistics at that time, for France – and all the merchandising team and everything else, were hired from scratch.

The strategy was different but based mostly on the fact that they had tried to do what they did in the UK and Germany and build on another company, but they didn’t find a suitable one, so they decided to build from scratch.

What was the first step of moving into France?

Back in 2000, Amazon was only selling books and media products, such as DVDs, CDs and VHS. They were the only products that, across the board, even in the US, that Amazon was selling. It was only in 2002 to 2003 that they started with electronics, particularly in the US. Basically, they started to hire people in those categories; people from the book industry and people from the music industry, in France, to build the merchandising and the cataloguing. That was the first step. They also employed people on the communication side. Very quickly, they hired the operations team, about three to six months later, to focus on the warehouse and the distribution network.

What is so difficult about building the front end and the language issues? Sometimes we see errors in Amazon, whether it’s Swedish or Dutch?

I think the language is definitely the most difficult thing. All the systems on search are the same, particularly at Amazon. There is not much difference between all the websites. They are run the same way and there is the same structure. They are all using the same systems, as well. That means all the backend catalogue, all the imaging processes and databases are the same. Obviously, the most difficult thing is to get the language right.

That is the reason Amazon has been very slow to expand. If you compare it to other websites in e-commerce, you have many which have been very quick to grow in many countries and Amazon has been very slow in doing that. Amazon wanted to have a local experience that was perfect. They didn’t want to have bad translations but wanted to have the real localization. In fact, that is the reason why you have so many languages that are not available on Amazon, because they want to get the perfect experience for the locals. That means it needs real language. The entire translation piece is a pretty heavy thing to do, for Amazon.

Because the backend catalogues are all integrated and global, in some cases, for Amazon?

Yes, for some of the products. It’s a good point. When you are particularly focused on media and cultural products, the catalogue is also country or language specific. Even country specific, because if you talk about the US and the UK, they both speak English, with small differences. But culturally, there is a big difference in literacy and stuff like that. You have to look at the cultural difference more than the language difference. Having those products, as well, is very important.

Of course, when we talk about electronics or those kind of things, that is more global and there are few differences with the products between Europe, the UK or the US.

Is that why they preferred to buy a business in Germany, or was that more about buying the infrastructure?

I think it was a little bit of both. There was, obviously, an advantage because, in both UK and Germany, they already had a fulfilment center and they had people working there; they also had a catalogue already. It’s a bit of everything that was already there – maybe not at the scale that Amazon wished to be – but that was part of the issue. It’s more looking for people who knew the product and had a certain level of operation. At that time, Amazon was not global in that they didn’t have the same system everywhere. Therefore, it was easier to have a warehouse already there, with some level of inventory. It was super easy for them and, after, they could convert that, very quickly, to the Amazon technology, in terms of the website or backend technology.

How did you approach that in France? I guess you had to build the catalogue in the language, product by product?

Absolutely. The first thing was hiring the team, hiring specialists in different product lines, coming from the book industry. Basically, they went to every publisher and started to build a catalogue, working with them, to absorb the catalogue as much as possible. I remember an anecdote from France where Amazon took the Amazon approach and, therefore, they wanted to be the place where you could get all available books. They went to every publisher in France and said, we are going to order one book of every title that you have printed. The publishers were not used to that. We bought one book of every single printed title, from every publisher, and we put them in the warehouse, to make sure that a customer could find a book if it was available. That was a way to start and to make sure that we had the right offer from scratch. Plus, obviously, all the titles that were no longer being printed and we worked with a distributor to get them, as well. That was one of the approaches we undertook in order to build the offer in France.

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Amazon vs CDON, Allegro, &

January 28, 2021

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