American e-commerce leader Amazon.com has introduced a slew of initiatives as part of a renewed strategy to help Chinese merchants sell abroad, at a time when China-founded rivals like Shein and Temu are gaining traction.
The moves include an innovation centre in the southern tech hub of Shenzhen, the first in the Asia-Pacific region, that would integrate the firm’s industrial, expert and supplier sources to help merchants “build brands, promote products and digitalise operations”, Amazon announced at a four-day event in the city that kicked off on Tuesday.
It also added Brazil to its list of destinations for Chinese merchants, ramping up the competition in Latin America. In April, fashion unicorn Shein named Brazil as its manufacturing and export hub for the region, while Temu, the rising online shopping platform owned by PDD Holdings, set up in the country in June.
Alibaba e-commerce platforms a key channel for European businesses to sell into China
Alibaba e-commerce platforms a key channel for European businesses to sell into China
To woo Chinese merchants, Amazon said it would allow them to use its supply chain network, including warehousing, distribution and couriers. In addition, Amazon will upgrade its selling platform and explore the use of artificial intelligence to facilitate “easy, efficient and legitimate businesses”, it said in a statement on Tuesday.
The decision comes as the company sees growing potential for the “Made in China, sold on Amazon” community. In the year through to the end of September, the number of items sold from China via Amazon increased by more than 20 per cent, while the number of merchants whose revenue reached US$10 million rose nearly 30 per cent, the company said.
The company “is honoured to work hand in hand with Chinese sellers … to sell high-quality Chinese products to the world,” said Cindy Tai, vice-president of Amazon’s global sales department in Asia. “The cross-border e-commerce industry is increasingly becoming a new driving force for China’s foreign trade.”
Tencent set to hit e-commerce milestone in 2023, closing in on ByteDance
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Despite betting big on cross-border e-commerce, Amazon has abandoned several other businesses in China, including third-party merchandise on its marketplace, its Kindle e-book service and a local app store.
With the renewed efforts, the American retail giant is winning back Chinese sellers, who suffered a major blow in 2021 after Amazon began to crack down on fake reviews. In September that year, the company revealed that it had closed about 3,000 online merchant accounts, backed by about 600 Chinese brands. After the crackdown, Chinese merchants saw their share among Amazon’s top sellers drop from 40 per cent at the beginning of 2021 to 33 per cent by the end of the year, according to data issued by Marketplace Pulse.
At the same time, Chinese rivals like Shein, Temu and ByteDance’s TikTok have taken competitive rivalry to a new level. Shein, founded in China but now based in Singapore, saw its net income reach US$2.5 billion this year, a 18-fold increase from just 1 billion yuan (US$137 million) in 2019, Bloomberg reported, citing sources.
Temu, which only began operating in the US in September 2022, saw its sales reach more than double those of Shein by September this year, according to Bloomberg Second Measure, which provides transaction data analytics.
ByteDance, the Beijing-based owner of short video hit TikTok, introduced its live commerce business model overseas in 2021. It is now available in markets including the US, Singapore and Indonesia, where it just revived operations by investing US$1.5 billion in GoTo Gojek Tokopedia, the biggest e-commerce platform in the country. Indonesia was one of TikTok’s best-performing regions with 124 million users.
In October, Jakarta banned online shopping on social media sites to protect smaller merchants and user data, forcing TikTok to briefly close its e-commerce service TikTok Shop.
