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Amazon Continues to Expand Its Exposure in China

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Growing overseas consumers

Amazon.com’s (AMZN) efforts to target overseas international consumers have started gaining ground against China’s two e-commerce leaders, Alibaba (BABA) and JD.com (JD). Amazon China, a subsidiary of Amazon, reported that revenue generated from Chinese consumers on Amazon’s global web portal, Amazon.com, showed a six-fold increase in 2015 over 2014.

Amazon helps Chinese vendors sell their products overseas by reaching out to every corner of the market. The company has reported that its Chinese vendor sales to overseas Amazon customers saw a 13-fold increase since 2012.

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Moreover, Chinese vendor’s sales from the US and Japan (EWJ) in 2015, collectively, show a two-fold increase over 2014. The above graph shows the top Chinese e-commerce retailers, among whom Tmall.com and JD.com have majority shares. Amazon constitutes 9.1% of the PowerShares NASDAQ Internet Portfolio (PNQI).

Tough competition from Alibaba and JD.com

Earlier last year, in March 2015, Amazon announced that it will open an online flagship store that would incorporate Alibaba’s Tmall. As a Tmall Seller, Amazon will pay commission to Alibaba for each transaction made on the Tmall.com web portal.

Amazon has been targeting Chinese consumers over the past ten years by leveraging its Chinese web portal Amazon.cn, which is aimed at Chinese consumers and offers foreign-branded products. Moreover, in October 2015, Amazon introduced electronics products to Amazon.cn from over 600 overseas brands including Beats, Mobee, and others. However, Amazon hasn’t reported any progress on Amazon.cn, which faces tough competition from Alibaba and JD.com (JD), both of whom also offer foreign brands to Chinese consumers.

In the next and final part of this series, we’ll look at Amazon’s 2015 holiday season sales.

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