Brands aren’t built overnight. Some of the most successful brands (Nike, LVMH, etc) have taken years to achieve the awareness (and more importantly relevance) they have now. In the case of LVMH, there is a key element to owning a piece of European heritage that has driven the company to be the largest luxury goods company in the world. Louis Vuitton owns much of their own supply chain. As an example, over the past couple of years they opened a manufacturing center in Texas to create leather goods here in the US that further allows them to create local stories around their products.
As Amazon took off here in the US, another similar startup business took its sights on the Far East. Alibaba may look similar to AMZN but under the hood they are very different. While AMZN handily beats BABA on top-line, BABA wins by a large measure on opex margins. This is inherent in their business model which is more similar to Ebay than to AMZN. Whereas AMZN primarily owns warehouses and inventory, BABA is lighter and collects a merchant fee as a middleman between buyers and sellers.
By guest author: Brandon Tendler
As Jorge Hernandes arrives at his destination in a darkly lit industrial complex off the beaten path in North Miami, he sees a small sign that says “pick up here”, Jorge enters the facility where about 7 other delivery drivers await, all of their names listed on the wall with real time updates tracking where their orders are in the kitchen. He notices in the back several separate units, each has its own prep area, kitchen and packing station. The to go bags leaving the facility are all adorned with different brands and contain different cuisines from new restaurant brands never heard of before.