Tuesday, November 21, 2017

Amazon to partner with its arch rival

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Amazon has announced it is to launch a shop on Tmall, the global e-market place of its arch rival Alibaba. After years of struggling to expand into China, the online giant is doing what Royal Mail also announced it would do earlier this week, and opening shop on the largest business-to-consumer retail platform in Asia.

The announcement strengthens the notion that Alibaba is reigning supreme in China, where its online marketplaces including Tmall and Taobao account for more than 70% of the country‘s online sales.

In recent months, Amazon has attempted to improve its market position in China, where there are ample opportunities to sell branded foreign goods to Chinese consumers who are becoming increasingly discerning of counterfeit merchandise online.

However, Amazon‘s market share in the country is stubbornly small: at 1.4% last year, it was the fifth-ranked ecommerce seller in China.

Boosting visitor numbers to its China website appears to be the driver behind the move by Amazon, at the expense of being perceived as capitulating to a rival.

“We welcome Amazon to the Alibaba ecosystem,” Alibaba said this morning, as Amazon indicated that the move will help it reach new customers, and “provide an additional channel and access to the high-quality international products Amazon can bring to Chinese customers”.

Amazon cited that the online store on Tmall will launch officially in April and is a pilot project, offering a selected goods