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To boost China sales, Amazon tries Alibaba partnership

03/06/2015| 10:16:58 PM|

Amazon has come up with a new China strategy, and that involves bowing to its biggest competitor Alibaba.

Ever since Amazon.com entered China about a decade ago, the company has been fighting a futile battle in the country’s burgeoning e-commerce sector.

Domestic rivals Alibaba Group and JD.com now control about 90% of the market, leaving little space for the world’s largest Internet retailer.

Now Amazon has come up with a new China strategy, and that involves bowing to its biggest competitor Alibaba.

On Thursday, Amazon has quietly opened a new store on Alibaba’s shopping site Tmall.com. The company is selling food, kitchenware, wine, shoes and toys sourced directly from overseas suppliers.

The partnership, which took Amazon two years to negotiate, gives the company more exposure to the 334 million active buyers on the eclectic Taobao bazaar and Tmall.com, a platform that is also home to the online operation of dozens of international brands- including Hugo Boss Hugo Boss’s Boss Orange Apparel Line and U.S. warehouse-club chain Costco Wholesale Corp.

Amazon opened a store on Alibaba’s Tmall.com Thursday, as the retailer tries to boost lagging China market share.

Amazon, which gets about 38% of its revenue from international markets, has been making preparations to tap into China’s rising appetite for imported products. It in August set up operation in the Shanghai Free Trade Zone, hoping to benefit from less stringent trade rules there to sell more products to Chinese consumers.

The Alibaba store gives the company a window to further boost brand awareness. As Forrester Research analyst Sucharita Mulpuru points out: “Everyone knows that Chinese e-commerce is dominated by Alibaba and at some point you go fish where the fish are.”

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TAGS: Amazon | Alibaba | ecommerce
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