U.S.-based retail giant Amazon on Friday opened a
storefront on rival Alibaba’s Tmall online marketplace, which hosts
other merchants’ stores in exchange for a cut of their revenues. Amazon
has been trying to establish a presence in China and this new move seems
to show that it has, for the moment, conceded to Alibaba, the largest
e-commerce company in China.
Amazon’s Tmall shop
focuses on selling imported goods like wine and toys, and is currently
in the pilot stage. Amazon said it will officially launch the store next
month, hoping to draw more international brands, AdAge reported. About a fourth of the brands on it are exclusively sold on Amazon.
Amazon’s sales in China accounted for just 1.3 percent of
the country’s overall business-to-consumer sales transactions in 2014,
while Tmall took the top spot with 57.6 percent of sales transactions,
Wired reported. China’s e-commerce market grew 21 percent in 2014, making it a
highly valuable market, according to figures
from consulting group iResearch. Amazon has struggled to gain a
foothold outside of the U.S., with an estimated $224 million in losses
from its non-U.S. operations in the third quarter of 2014, Financial
Times reported.
Alibaba has also expressed its intent to expand into the
U.S., announcing a new service in January that would make it easier for
U.S. companies to sell directly to Chinese consumers. Alibaba also announced a cloud-hosting center in Silicon Valley on Wednesday, Reuters reported.
“This is a very strategic move for us,” Ethan Yu, head of
Alibaba’s cloud business, told Reuters. "International expansion is
actually a company strategy in the coming few years.”
Alibaba founder and CEO Jack Ma has downplayed the rivalry
between his company and Amazon. When Alibaba began expanding in the
U.S., he reportedly said that he viewed Amazon as a potential partner
rather than a competitor. “We are coming here not to compete. We're
coming here to help a lot of small business, which I think a lot of
things may need to be done. It's not of a competition," Ma told Bloomberg.
An Alibaba spokeswoman also told
CNet that Amazon’s storefront was welcome on Tmall. “Tmall has been a
committed leader in providing quality products and services to
consumers, and we continuously seek out partners who share the same
passion," the spokeswoman said. "We welcome Amazon to the Alibaba
ecosystem, and their presence will further broaden the selection of
products and elevate the shopping experience for Chinese consumers on
Tmall."
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