Amazon Opens Store on Alibaba

http://qz.com/357452/amazon-throws-in-the-towel-and-opens-a-store-on-alibaba/

It’s a humbling choice for Amazon. Though Amazon’s been selling goods online in China for about a decade under Amazon.cn, it never managed to ride the Chinese e-commerce craze. Meanwhile, Tmall and JD.com, Alibaba’s prime competitor, continue to dominate. As Tech in Asia notes, the move means that Amazon is essentially paying Alibaba a commission to sell its goods.

Comments

# 1.   

"It’s unclear what’s behind the move" writes the reporter.

Hmm. Well, I don't think it's that unclear.

Back when the US was keen to get China admitted to the WTO, China was very crafty in gaining concessions of many sorts. Partly as a result of them, and partly because the Americans neglected to gain their own concessions in the area of e-commerce -- in their arrogance, they probably overlooked China's potential in this area -- China has been able to construct largely unscalable walls to keep multinationals locked out of much of the explosive growth in China's online purchasing platforms.

In Amazon's case, those walls have been:

1) Obtaining import licenses for foreign books, theoretically one of the "points of difference" between Amazon vs. China-based booksellers --- Very difficult to get, I'd assume. If Alibaba, a domestic firm, applies for those licences (EVERY foreign book must have an individual license), we can assume the process will go much faster;

2) In earlier days, local consumers simply couldn't pay in anything but RMB, which meant that Amazon had to take payment in RMB, and then go through a labyrinth of regulations so it could repatriate profits in hard currency;

3) More lately, even though payments can now be made online in RMB and dollars (the latter, if you have an int'l credit card), China has made it virtually impossible for foreign firms to take online payment direct, so profits continue to be skimmed off by payment "facilitators". . . the fastest-growing being, you guessed it, AliPay.

Bruce, March 7, 2015, 3:35a.m.

# 2.   

It's worth noting that Amazon isn't selling books through this store, though. While it's true that they've had a very hard time getting import licenses for their books (rumor has it that their book imports are actually still unlicensed), I doubt that has anything to do with the opening of this store, and I'd be very surprised if their books started showing up there.

Here's a direct link to the shop, for those who are curious.

Eric Abrahamsen, March 7, 2015, 4:09a.m.

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