'Double 11' race heats up with Amazon offering

China Daily, October 30, 2014

Be it made-in-Germany kitchenware or infant formula from the United States, Chinese shoppers can now place orders directly from overseas online shopping platforms owned by Amazon.com Inc as the e-commerce giant steps up efforts to boost its market share in China.

Six Amazon platforms in the US, Germany, Spain, France, the United Kingdom and Italy have officially opened for sales to Chinese consumers, who have shown growing appetite for overseas brands and products.

The plan, announced on Wednesday by Amazon China as part of its strategy to boost sales during China's upcoming Double 11 online shopping festival, is seen as a counterattack to China's e-commerce king Alibaba Group Holding Ltd, which also pinned its hopes on a "globalization" strategy to break its sales record of 35 billion yuan ($5.73 billion) achieved on Nov 11, 2013.

Niu Yinghua, vice-president of Amazon China, said the multinational e-commerce company hopes to capitalize on its rich overseas product portfolio and extensive network of suppliers to drive growth in China.

According to Amazon China, customers from China can choose from around 80 million items on the six overseas platforms. The purchased goods would be delivered to China within three days by an express delivery service after completing the necessary customs procedures.

Niu from Amazon, which runs 13 different sites around the world with online shopping services covering 67 countries and regions, said many Chinese e-commerce players want to boost their overseas online shopping business by building partnerships with overseas suppliers.

"No matter how fast they do and how hard they try, it still takes time for them to achieve what we've achieved," she said, adding Amazon China owns the biggest number of overseas suppliers among direct sales online platforms in China. The company offers 620,000 different items from more than 6,000 foreign brands.

Alibaba, which accounts for a combined market share of 80 percent in China's business-to-customer and customer-to-customer market, said earlier this year that more than 200 overseas merchants from more than 20 countries have confirmed participation in its Double 11 event.

Vanessa Zeng, a senior analyst at Forrester Research Inc, said that it is obvious that Amazon is trying to power up its e-commerce market position in China with its cross-border strategy.

"The Nov 11 online shopping festival is a good stage for Amazon to showcase its global reach," Zeng said. However, the lower traffic on Amazon platforms and its different web design may not go down well with Chinese buyers, she said.

According to iResearch Consulting Group, Amazon accounted for only 2 percent of China's total online market in 2013, which put it in fifth place.

Statistics from Internet consultancy Analysys International show overseas online purchases in China jumped from about 10 billion yuan in 2010 to more than 80 billion in 2013.

But Neil Flynn, head equity analyst at Shanghai-based Chineseinvestors, a leading financial analysis firm of US-listed Chinese companies, said Alibaba will be the most successful e-commerce firm during the upcoming online shopping festival.

"It's very difficult for Amazon to get a strong foothold in China because of the dominance of Alibaba and JD.com Inc. Amazon has good logistics networks in the larger cities, such as Shanghai, but away from these cities, the domestic giants have a clear advantage," Flynn said.

"Consumers are used to the styles of Alibaba and JD.com, and the only way for Amazon to take business away from them is to offer better deals," he said.