Part 4 (1/2)
BOL.fr was the French subsidiary of BOL.com (BOL: Bertelsmann On Line), launched in August 1999 by Bertelsmann, a German media giant, in partners.h.i.+p with Vivendi, a French multinational company.
Unlike their counterparts in the U.S. and in U.K., where book prices were free, French online bookstores couldn't offer significant bargains. A French law - the Lang law - regulated prices. (Jacques Lang was the ministry of culture who fathered the law to protect independent bookstores.) The 5% discount allowed by law for both traditional and online bookstores was offering little lat.i.tude to Amazon.fr, Fnac.com, and the likes, who were nevertheless optimistic about the prospects offered by the French-language international market. A significant number of orders was already coming from abroad, with 10% of orders for Fnac.com as early as 1997.
Interviewed by AFP (Agence France-Presse) on the Lang Law and the meager 5% discount allowed for book prices, Denis Terrien, president of Amazon France (until May 2001), explained in August 2000: ”Our experience in Germany, where book prices are also regulated, shows that prices are not the main factor for our customers to purchase books at Amazon. The main factor resides in the additional services we provide. We offer a whole bunch of services, beginning with a large choice in our catalog - we sell all the French cultural products. We have a powerful search engine. As for music, our site offers the only catalog searchable by song t.i.tle. In addition to the editorial content of our site, which ranges from the one of a traditional bookstore to the one of a magazine, we have a customer service 24h/24 7days/7, something unique in the French market. Finally, an additional specificity of Amazon is our commitment for a fast delivery. We aim to have more than 90% of our products in stock (at our storage facility).”
Amazon's economic model was already admired by many in Europe, but could hardly be considered a model too for staff management, with short-term labor contracts, low wages, and poor working conditions.
Despite the secrecy surrounding the working conditions of the European staff, problems began to filter. In November 2000, the Prewitt Organizing Fund and the French union SUD-PTT Loire Atlantique launched an awareness campaign among the employees of Amazon France, after meeting with a group of 50 employees in the distribution center of Boigny-sur-Bionne. In a statement following the meeting, SUD-PTT denounced ”degraded working conditions, flexible schedules, short-term labor contracts in periods of flux, low wages, and minimal social guarantees”.
Similar action was conducted in Germany and in U.K. Patrick Moran, head of the Prewitt Organizing Fund, founded an employee organization under the name of Alliance of New Economy Workers. In response, Amazon sent internal memos to its employees, stressing the pointlessness of unions within the company.
At the end of January 2001, Amazon, which employed 1,800 people in Europe, announced a 15% reduction of its European staff. It also closed its customer service center in The Hague (Netherlands). Its 240 employees were offered to work in one of the two other European customer service centers, in Slough (United Kingdom) and in Regensberg (Germany).
= Amazon worldwide
The second group of foreign clients - after European customers - was in j.a.pan. In July 2000, during an international symposium on information technology in Tokyo, Jeff Bezos announced his intention to launch Amazon j.a.pan in the near future. He insisted on the high potential of the j.a.panese market, with expensive real estate affecting the prices of goods and services and, as a result, online shopping being more convenient than traditional shopping. High population density would mean easy and cheap home deliveries.
A j.a.panese call center opened in August 2000 in Sapporo, a city on the Hokkaido island. Amazon j.a.pan opened three months later, in November 2000, as the fourth subsidiary of Amazon and first non-European subsidiary, with a catalog of 1.1 million t.i.tles in j.a.panese and 600,000 t.i.tles in English. To reduce delivery times to 24 to 48 hours instead of six weeks for books published in the U.S., a large distribution center (15,800 m2) was created in Ichikawa, a town in the east of Tokyo.
In November 2000, Amazon had 7,500 employees, a catalog of 28 million items, and 23 million clients worldwide. It opened its digital library with 1,000 ebooks, and the promise of many more t.i.tles for soon.
Amazon also began focusing on the French-language market in Canada. It hired staff knowing the language and the market, to be able to offer French-language books, music and films (VHS and DVD) in a Canadian subsidiary. Amazon Canada, the fifth subsidiary of the company, was finally launched in June 2002 with a bilingual (English, French) website.
Surprisingly, even for the marketing of a main online bookstore, paper was not dead. For two consecutive years, in 1999 and 2000, Amazon sent a print catalog to its customers (10 million in 2000) before the holiday season.
2001 marked a turning point for the company, with the need to address the internet bubble affecting the ”new” economy and so many companies. Following a deficit for the fourth quarter 2000, Amazon reduced its workforce by 15% in January 2001.
1,300 employees lost their jobs in the U.S. 270 employees lost their jobs in Europe. Jeff Bezos decided to diversify the products sold online, and to sell not only books, videos, CDs and software, but also health care products, toys, electronics, kitchen utensils, and garden tools. In November 2001, cultural products - books, CDs and videos - represented only 58% of sales, the total of which were US $4 billion, with 29 million customers.
The company was beneficiary for the first time in the third quarter 2003.
In October 2003, Amazon launched a full text search (Search Inside the Book) after scanning the text of 120,000 t.i.tles, with many more to come. It also launched its own search engine, A9.com.
A sixth subsidiary - named Joyo - opened in China in September 2004.
The net income of Amazon was US $588 million for 2004 - 45% of which from its six subsidiaries (Canada, China, France, Germany, j.a.pan, U.K.) -, with a total of $6.9 billion for sales.
Amazon became a reference for global online commerce.
In July 2005, for its 10-year anniversary, Amazon had 9,000 employees, and 41 million clients enjoying attractive prices for a whole range of products they could get within 48 hours in one of the seven countries with an Amazon platform.
Amazon also sold more and more ebooks. In April 2005, it bought the French company Mobipocket, specialized in ebooks and readers (software) for PDAs.
In November 2007, Amazon launched its own reading device, named Kindle, with a catalog of 80,000 ebooks on Amazon's website.
538,000 Kindle were sold in 2008. A new version of Kindle, named Kindle 2, was launched in February 2009, with a catalog of 230,000 ebooks.
= What about small bookstores?
Local bookstores have closed one after the other, or have had a hard time keeping up with the compet.i.tion of Amazon.com and other online bookstores. Amazon and others are also bad news for specialist bookstores, for example the travel bookstore created in 1971 by Catherine Domain in Paris, France.