Amazon.com Inc. (AMZN - Free Report) announced its plans to build a fulfillment center on Tsawwassen First Nation lands at Deltaport, in British Columbia’s Lower Mainland, to meet the growing demand in the online shopping space.
Per Amazon, the new facility, spanning 450,000 square foot, will create more than 700 full-time jobs. The center will primarily focus on items such as books, toys, small electronics and home goods.
The company has been spending heavily on its new fulfillment centers over the past few years. Fulfillment centers are giant warehouses that help online retailers store and ship products, as well as handle returns quickly. These are important for providing the level of service that customers have started expecting from Amazon.
The company already operates two faculties in Delta and New Westminster, and employs approximately 800 jobs. Amazon also operates a tech hub in Vancouver, employing approximately 1,500 people.
The world’s largest online retailer has been strengthening its presence all over the world.
In our opinion, Amazon must maintain its U.S. market share while expanding globally, in order to retain its leading position among peers, namely, Microsoft (MSFT - Free Report) , Alphabet’s (GOOGL - Free Report) and Alibababa (BABA - Free Report) . To this end, the company needs to invest more in fulfillment, as well as technology and content, especially in international markets with less penetration and higher growth rates.
Though increased expenses may hurt Amazon’s bottom line in the near term, we believe that this is necessary to maintain its dominance in this highly competitive market.
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