Amazon Spain launch may presage new overseas push

Wed Sep 14, 2011 4:31pm EDT

* Launches in Netherlands, Sweden, India may follow

* Expansion may boost revenue, pressure margins-analyst

By Alistair Barr

Sept 14 (Reuters) - Amazon.com Inc (AMZN.O) launched an online store in Spain on Wednesday, a move that may be the start of a new international push for the world's largest Internet retailer.

Amazon.es was offering books, music, DVDs, electronic, software and other products when Reuters checked the website midday Wednesday, Pacific time in the United States.

A version of Amazon's Prime service was also offered on the new site. Customers can sign up as Amazon Prime members and get free two- to three- day shipping for 14.95 euros, or about $20, a year.

Amazon Spain launched with a big inventory that includes 2.5 million books, 450,000 CDs, 130,000 DVDs, 65,000 electronics products and a variety of games, toys, watches and small appliances.

"Amazon is entering a phase of rapid international expansion, similar to 1998-2002 when it launched in 5 new countries in 5 years - UK and Germany in 1998, France and Japan in 2000, Canada in 2002," Mayuresh Masurekar, an analyst at Collins Stewart, wrote in a note to investors on Wednesday.

After entering China in 2004, Amazon took a breather from international expansion for several years. But in late 2010, the company launched in Italy.

Masurekar expects Amazon to start websites in the Netherlands, Sweden and India within the next three to four years.

International expansion will help revenue grow, but it could hit profits, at least in the short term. That's because Amazon has to spend money upfront to build warehouses, accumulate inventory and set up shipping and other logistics.

The company also tends to offer promotional discounts when it enters new markets.

"International expansion supports our thesis of higher revenues and lower margins," Masurekar said.

Amazon shares rose 1.4 percent to close at $222.57 on Wednesday, leaving the stock up 22 percent so far this year. (Reporting by Alistair Barr in San Francisco; Editing by Tim Dobbyn)

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