Amazon escalates Chinese e-commerce strategy with Prime launch

REUTERS/Kim Kyung-Hoon/File Photo

BEIJING (Reuters) – Inc has launched a tailored version of its Prime service in China to tap consumer demand for overseas goods, putting the US online retail firm in closer competition with local rivals Alibaba Group and

Chinese shoppers have been driving a boom in “cross border” shopping with high demand for products, from infant formula to luxury handbags, bought through online platforms like Alibaba’s Tmall International and via informal “daigou” shopping agents.

Amazon, which dominates online shopping in the United States, is a bit-part player in China, lagging far behind market leaders Alibaba and The US firm does, however, offer local shoppers a bridge to sellers in overseas markets.

“The launch of Prime in China represents a new convenient way for Chinese customers to access authentic and quality products from all over the world,” Greg Greeley, Amazon Prime’s vice president, said in a statement emailed to Reuters on Friday.

Amazon has been struggling to gain a serious foothold in China, where it held just 1.1% of market share in 2015 according to iResearch, and even launched a store on rival Alibaba’s Tmall platform last year in an attempt to boost sales.

Alibaba and have also been expanding their cross-border offerings to link Chinese shoppers with global sellers.

Under the Prime service, Chinese shoppers would pay 388 yuan ($57.23) for a year-long subscription, which would give them access to unlimited free international shipping on orders over 200 yuan ($29.50).

Amazon declined to comment on if it would launch other Prime services it offers in the United States in China, including what could be contentious online music and video services.

China has stringent rules on foreign media products. Apple scrubbed their iBooks and Movies services from the market earlier this year, while this month Netflix abandoned plans to enter the market all together.

($1 = 6.7796 Chinese yuan renminbi)

(Reporting by Cate Cadell; Editing by Muralikumar Anantharaman)

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