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Amazon Opening Imported Goods Store On Alibaba

Posted by ryuzaki0 on from the goes-both-ways dept.

itwbennett (1594911) writes "Amazon is usually on the other end of the 'if you can't beat em, join em' dynamic. But next month Amazon is launching a store on Alibaba's Tmall.com site to get access to some of the Chinese online retail giant's 265 million monthly active users. Amazon already has its own e-commerce site geared for the country, but its share of China's online retail market is only 0.8 percent, according to Beijing-based research firm Analysys International. Alibaba, in contrast, controls three quarters of the market through its Tmall and Taobao Marketplace sites."

9 of 31 comments (clear)

  1. Maybe if they actually sold goods too... by thegarbz · · Score: 3, Interesting

    I'm not surprised about Amazon's limited market share given the number of requests I get from Chinese colleagues to buy something from Amazon and bring it over when I go over there on a business trip.

    1. Re:Maybe if they actually sold goods too... by Anonymous Coward · · Score: 2, Interesting

      Well, good luck them for them. As an ex-mainlander who managed to make some cash on early alibaba boom in the previous decade I can tell them that good and well ran store don't stay on tmall or 1688 for long. When they establish good, solid, recognizable brand for themselves they usually wrap up their tmall stores and open a conventional e-commerce outlet, so they don't have to pay baba for traffic. I believe that this will be the reason for Alibaba's coming downfall. Bet short in a few years.

    2. Re:Maybe if they actually sold goods too... by Anonymous Coward · · Score: 5, Interesting

      I'll explain it to you, dear Mr. Laowai. Alibaba's sites are actually not that popular in China. China has over 20000 on-line retailers with revenues over one million USDs (2012 data). On-line commerce is not limited to Alibaba's sites alone. While they do have a dominant position in some product categories, they do not have an overwhelming grip on e-commerce market in China in any form as they claim in their IR communiques. This is a blatant lie they told US SEC and naive US investors to get that insane valuation.

      I really doubt that Amazon can get any beachhead in Chinese market by going on Alibaba, more likely they are just giving Mr. Ma free money. They will get no more than yet another grey, faceless listing page on tmall, while still having to pay Baba for greatly overpriced traffic (Alibaba's click costs 12 times more than Chinese average PPC market rate).

      Alibaba does report their high goods turnover, insane profitability, and ability to act according to "strategic vision", however they don't ever mention that:
      1. Their biggest foreign market is... Russia, a country that is soon to go down.
      2. Many of their side businesses are being attacked and closed down by Chinese authorities. The attitude of the communist elites towards Mr. Ma's business is overwhelmingly negative. The privileged communist caste loath him for the fact that he came to money and prominence without sucking their dicks, and they are putting efforts to fix that.
      3. Their turnaround digits can't be genuine for the fact that the practice of selling your own goods to yourself to up your computed rating is widespread among vendors.
      4. They are genuinely loosing that fight for the mobile market. They went low down on that, so they simply have to force desktop users to make purchases from the phone, so they can draw digits for investors.
      5. Their top managers are no more than decorations, hired for their good appeal to investors. In reality they are isolated from all, but most symbolic forms of decision making. Their mid-managers are, without a single exception, friends and buddies of Alibaba's original team, hired with no regard for real skills and suitability for position.
      6. They have no real plans, and they change their "long term" business plan on the go. Hundred million dollar projects are initiated and closed on a whim. The management body within Alibaba that actually runs company's operations is a revolving door establishment. They loose best and brightest, while retaining underperformers. They have to compensate by paying external management consultants big buck for any substantial undertaking they try.

    3. Re:Maybe if they actually sold goods too... by Anonymous Coward · · Score: 2, Interesting

      It is a real problem to find good stuff on tao and tmall even for Chinese person (who I am). These sites are popular among rural dwellers, for whom the risk of getting a broken good is outweighed by change of getting stuff at silly low price. City dwellers don't shop there much, preferring to buy higher values goods at internet outlets run by brands.

    4. Re: Maybe if they actually sold goods too... by Anonymous Coward · · Score: 3, Informative

      I was there last week. They're now checking mainlanders at the border to ensure they don't take more than (IIRC) 1.8 kilos (3 big tins, basically) of baby formula per locust per day back with them to Shenzhen. And some other stuff as well, but they actually have big signs up warning that anything in excess of that amount will be confiscated.

      Watch out for the border guards on the mainland side, too, at least at Luohu--many of them will try to steer you into "bargains" like cab rides into town with their buddies who'll say they'll charge 100¥ to get you in the car, then demand 200 when they drop you off. (The going rate from an honest cabbie is more like 20¥.) Or you, if you're not carrying too much, you can simply walk all the way to the end of the Customs building rather than coming out in the middle like some of the border guards encourage you to do (fair enough, it *is* faster to get out of the building that way), get on the Shenzhen Metro, and pay 2¥ to ride to the city centre.

      As cities go, Shenzhen is somewhere between horrid and nasty. Lots of folks coming from the mainland stop off there for a day or two on their way to HK, not knowing any better. My advice is to take the bus or train direct from Guangzhou--those go through a separate border crossing which is heaps nicer and faster to get through.

  2. nothing to be ashamed there for Amazon by Anonymous Coward · · Score: 2, Informative

    I bet this itself is a desperate measure to stop vendors turning away from Amazon and running their foreign stores by themselves.

    Amazon has close to no overseas presence outside of English speaking countries. Their total overseas revenue is miniscule, comparable only to third and fourth tier online retailers in China.

    1. Re:nothing to be ashamed there for Amazon by nojayuk · · Score: 3, Informative

      "Amazon has close to no overseas presence outside of English speaking countries."

      Well, apart from France (75 million people), Germany (80 million), Japan (120 million), South Korea (50 million), Spain, Greece, Italy, the Scandinavian countries, Holland, Belgium etc. etc.

      Add them up and you'll find the populations of Amazon's non-English-speaking markets are way larger than the English-speaking nations. The total number of customers and total sales may be lower -- Japan, for example has Rakuten/Tenso as a serious competitor to Amazon.co.jp for online sales -- but they're out there and selling to anyone with a credit card and a keyboard whatever language they speak.

  3. Re: your point #2 by Anonymous Coward · · Score: 2, Interesting

    Apart from the subject to be abjectly subject for, in what way is that different from the way the West acts?

    Look at the hate for Al Gore or Elon Musk.

    People who have made a mint without sucking the cock of Big Money under the Ayn Randian ideology of "people with money have shown the right to have money" that capitalism has clutched to its breast as a True Faith. You know, the people called "Wealth Creators" and who should NEVER be asked to pay more in case they leave and take the jobs they created washing their fleet of cars with them.

    Honestly, take a look at the current system here in the west.

    Apart from China wanting to hold the state as deserving of Holy Communion and the west wanting to hold the wealthy as deserving of Holy Communion, there's fuck all difference in how they act if someone is successful without holding to the cherished ideals of those in power.

  4. Re:Will they let me buy from the US in the UK? by Anonymous Coward · · Score: 2, Interesting

    I don't believe that they can even one million if they go to open a store there. Alibaba is the biggest, but by far not the dominant player. It is very hard for an individual store to keep its place in the top for any popular category there as the rating algo does "bury" the old products in favour of new ones to boost turnover. Succeeding on Alibaba is all about product selection, and not about brand. The whole concept of a "brand" is meaningless in China, where the term doesn't even a literal translation. Chinese simply do not understand the reasons for brands to exist, as they don't do mentally link the manufacturer and the label on the final good because they know that any factory can put whoever's label on its products.

    Chinese consumer market simply is not what we know as a market in America. The whole concept of doing business is entirely different from ours. And this is the main reason why all and every American company except for Wallmart screwed up royally in China.