01 Nov 2013 (The Globe and Mail) Amazon takes Vancouver, but to do what?
As seen on www.theglobeandmail.com
VANCOUVER, BC, October 28, 2013 — Amazon.com Inc.’s expected expansion in Vancouver brings excitement about the city’s bright future, not only as a technology hub, but a burgeoning source of jobs in Canada. But right now, there are more questions than answers about who might benefit from the expansion.
Technology blog Techvibes reported on Oct. 22 that Amazon has leased out 91,000 square feet of new office space in the Telus Garden – estimated to accommodate up to 1,000 employees, according to Matthew Carlson, associate vice president of real estate firm Collier International.
Amazon did not respond to repeated requests for comment on its plans. It has already listed over 100 jobs for its Vancouver office on its career site, about 70 of which are for software engineers. Amazon’s Vancouver website cryptically states it “anticipates growing quickly,” but provides no more details.
Ben Pickering, COO of Vancouver-based SoMedia Networks, says: “based on [the career site], they are hiring lots of engineers but also product managers, so that indicates that they’re looking at potentially launching new initiatives out of Vancouver,” adding that “we can only speculate on how much and how quickly they would hire.”
Amazon has recently expanded its retail offerings in Canada. In January 2013, Amazon introduced its popular Prime program to Canada. Amazon also began offering its cloud storage services to Canada in May 2013.
But Amazon.ca continues to come up short compared to the convenience and breadth of Amazon.com. While Amazon Prime is now available, it does not include the free television and movie streaming service that American subscribers enjoy, or the free e-book lending to Kindle users. Amazon’s two-day shipping is unavailable to many Canadian rural postal codes, even through the Prime program. Amazon Locker, Amazon Student, and Amazon Mom are unavailable in Canada. There is also the issue of pricing: consumers have noticed prices on Amazon.ca are sometimes much higher than that of Amazon.com.
This disparity in services can arguably be attributed to Canada’s relatively small population as well as the geographic challenges faced by Canadian e-commerce retailers. However, Amazon has been aggressive in targeting foreign consumers. Its sales revenues are uniquely international – 44 per cent of Amazon’s sales were made outside the U.S. in 2012. By comparison, only 28 per cent of Wal-Mart’s sales were international that year, and Target didn’t even operate outside the U.S. until 2013, when it expanded to Canada.
It’s unclear whether Amazon’s Vancouver expansion might foster new services in Canada. Mr. Pickering says “if they do want to focus more dedicated resources on Canada eventually, it would make sense to have them housed here. But the reality is that Amazon’s plans for any given project are much larger than one country.”
Bill Tam, CEO of the B.C. Technology Industry Association, agreed, noting, “Amazon’s development centres tend to build capabilities that apply globally…I wouldn’t be surprised if Amazon’s efforts in Vancouver were broader than just Canada.”
Regardless, Amazon’s bigger presence will shake up the technology jobs market in Vancouver. “It’s a mixed blessing. Some applaud it because it brings wealth to the city, but on the flip side, if you are a hiring executive at a company, you look at this with some trepidation,” said Mr. Tam, warning of the competition this will create in recruiting the brightest local engineers.
“Vancouver is distinctly different than Silicon Valley,” added Mr. Tam, citing Vancouver’s emphasis on sustainability and creative sectors. “The challenge is maintaining the right balance between these big companies that come into the area, and the home-grown companies.”