Amazon is moving to Czech Republic

Walking around Prague we can see billboards advertising employment at the world's largest internet retailer, Amazon.com. Available positions include HR managers, IT specialists and middle management. The Czech Republic is another country where Amazon.com is launching its activities.

This is another milestone for the company – until now Amazon has been building its logistics centres in Western Europe and in countries much larger than the Czech Republic. Now, Amazon has bold plans for the Czech Republic and Poland with its billions for investment. Compared to Western Europe, the Czech Republic offers cheap skilled labour and its trade unions have limited power – an important factor considering the company's current problems in Germany. At the same time, the Czech Republic has a strategic location and first-rate infrastructure.

Amazon's plans were welcomed by major representatives of the Czech Republic, who constantly proclaim their support for these investments. Strong support comes with proclamations of Prime Minister Sobotka, President Zeman and Minister of Industry and Trade Jan Mládek, who played an active role during negotiations with municipal governments. New logistics centres create many new workplaces, important for the development of less prosperous areas.

Communication with municipal governments is crucial

Amazon encountered some obstacles as commonly experienced by most large projects. These obstacles halted construction of a logistics centre in Brno and delayed the establishment of a logistics centre in Dobrovíz. The reason for these early complications is a lack of initial communication with municipalities. Municipalities are affected by these large investments and they also have the authority to decide what will be built in their territory. Amazon has learnt from this experience and is not backing down from its bold plans in the Czech Republic – In cooperation with the Czechs, Amazon is looking for win-win solutions that will show results.

To date, it is clear that Amazon will be operating at least two logistics centres in the Czech Republic. A third logistics centre has not been determined. At the same time, Amazon has signed a deal to lease extensive office space in Prague’s district Dejvice.

Logistics centre in Dobrovíz for returned goods

Amazon's first logistics centre in the Czech Republic is located in Dobrovíz. The centre was opened in 2013. It covers an area of 25 000 m2 and employs about 1 000 people. The centre serves as a hub for goods returned by customers from Germany. Amazon chose Dobrovíz as its site, next to the Vaclav Havel Airport and with good access to the highway system.

Logistics centre in Dobrovíz for the European market

The second logistics centre will be located next to the centre for returned goods. The cornerstone of this logistics centre, planned to cover 95 000 m2 (the equivalent of 14 football fields), was laid in September 2014. The estimated cost of developing the site is EUR 75 million (CZK 2 billion). Director of Amazon Europe Tim Collins, Minister of Industry and Trade Mládek and a representative of the municipality of Dobrovíz participated in the cornerstone laying ceremony. 

The developer Panattoni plans to complete construction during summer 2015 - the company reports that up to now everything is going as scheduled. The new logistics centre in Dobrovíz will create 1700 permanent and another 3000 seasonal workplaces within 3 years of opening. The distribution centre will serve customers from Western Europe. This new distribution centre is conveniently located for Czech sellers on Amazon, who will have closer to their foreigner customers.

Other plans of Amazon for the Czech Republic

Mr. Taschner, Spokesperson for Amazon in the Czech Republic, confirms that Amazon is continuing to look for other suitable locations for logistics centres in the Czech Republic.

Amazon has also rented 5 800 m2 of offices in Prague´s attractive district of Dejvice in a newly developed building named The Blox. The leasing of additional space covering thousands of metres is under negotiation. White collar employees will be employed in the offices, among them HR managers who will hire workers for the warehouses.

Amazon.cz

Amazon.com does not have a significant position on the Czech market and Czech consumers mostly use the services of Czech internet retailers. The internet domain Amazon.cz still redirects visitors to Amazon.co.uk. Considering the small Czech market, Amazon does not give high priority to appealing to Czech consumers. 

Developed logistics capacities will mainly serve foreign markets. However, Amazon is fully aware of the strategic location and other benefits offered by the Czech Republic. For instance, the Czech Republic has the second lowest office rentals in Central and Eastern Europe. Amazon's investments serve as a good example of how to effectively utilize the Czech Republic for business activities in Western Europe.