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The Amazon Firms Acculturation in the Middle East
Acculturation occurs when someone is introduced to a new culture or placed in one, and they accept, learn, and adjust to the unique cultural context. Organic growth is when a business expands by boosting internal sales and production. The expansion excludes revenues or expansion related to acquisitions and mergers but instead focuses on a rise in sales and development using the companys resources. E-commerce (electronic commerce) is the activity of electronically buying or selling products on online services or over the Internet. Generally, Acculturation has attached benefits to Amazons expansion into the Middle East, as Amazon now offers financial services, creating a new international market and decreasing sales growth.
Firstly, Amazon has pushed into the offering of financial services. Amazons financial services strategy has mostly centered on boosting ecosystem participation through three crucial pillars: payments, cash deposits, and loans. Amazon Pay, a digital wallet, the Amazon Cash program, offers access to cash-on-delivery payment options (East, 2021). Amazon Lending for small businesses and Amazon Prime cards for consumer lending are just a few solutions introduced due to this strategy. Amazon has so far mostly concentrated its fintech efforts on the Indian market. In 2016, the tech giant released its Amazon Pay digital wallet. Since then, it has added a credit card, joined a state-backed payments network, and begun processing payments for goods like theater tickets and airline tickets, as well as phone and utility bills.
Secondly, Acculturation led to Amazons expansion into the Middle East by creating a new international market. A potentially lucrative market for Amazon in the Middle East has been created. Millionaires abound in some areas of the region, and as most business dealings are conducted in English, it is simple for vendors headquartered in the United States to grow (Levy, 2019). However, it also entails particular dangers, such as a reliance on oil. As worries about a global slowdown weighed on oil prices last year, Saudi Arabias economy contracted for the first time in nearly ten years. Amazon is actively luring new merchants into the industry. As one of the biggest online retailers in the Middle East, Souqs acquisition by Amazon was intended to help the company establish itself there fast. But after the acquisition, the corporation hasnt taken any meaningful actions.
Thirdly, Acculturation led to Amazons growth of sales decreasing and a market for goods. Amazon is focusing on the Middle East sector as its foreign sales growth slows. Amazon does not break out revenues for the Middle East, but according to S&P Global Market Intelligence data, the companys foreign sales increased by 21.3% from 2017 to $65.87 billion in 2018. Compared to 23.4% in 2017 and 24.2% in 2016, international sales increased by 10.4% in the first half of 2019. Moreover, according to vendors, Amazon is especially eager to provide electronics and beauty products like perfume to the two biggest Middle Eastern economies. As its 17th global site, Amazon debuted a regional service in Turkey in September. On the earnings call in October, the companys finance head, Brian Olsavsky, stated that although the story differs country by country, Amazon is extremely delighted with the international business.
In summary, Acculturation happens when someone is exposed to or placed in a new culture and accepts, picks up on, and adjusts to the specific cultural environment. A company can grow organically by increasing internal sales and output. The expansion does not include revenues or growth attributable to acquisitions or mergers; instead, it concentrates on increasing sales and development by utilizing the organizations resources. Electronic buying or selling of goods through online stores or the Internet is known as e-commerce (or electronic commerce ). Acculturation has generally attributed advantages to Amazons entry into the Middle East because the company now provides financial services, opening up a new global market and slowing sales growth.
References
East, F. M. (2021). Amazons growing foothold in the Middle East. Fintechnews Middle East. Web.
Levy, E. K. (2019). Amazon plans to launch a new Middle East marketplace two years after buying Souq for $580 million. CNBC. Web.
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