China biggest e-commerce market
The Asia-Pacific region—especially China (FXI)—is a key market for e-commerce players. The region alone accounted for over 40% of the world’s retail e-commerce sales in 2015, according to eMarketer.
The Asia-Pacific region as a whole is growing faster than any other region thanks to India and China, two of the fastest-growing economies in the world. Amazon (AMZN) 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.
Tough competition from Alibaba and JD.com
Amazon.com’s 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.
Moreover, Chinese vendor sales from the United States and Japan in 2015 collectively showed a two-fold rise over 2014. The above graph shows the top Chinese e-commerce retailers, among which Tmall.com and JD.com have the largest market shares.
Earlier last year, in March 2015, Amazon announced that it would 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.
Moreover, in October 2015, Amazon introduced electronics products to Amazon.cn from over 600 overseas brands, including Beats, Mobee Technology, and others. However, Amazon hasn’t reported any progress on Amazon.cn, which faces tough competition from Alibaba and JD.com, both of which also offer foreign brands to Chinese consumers.
More recently, Amazon partnered with Baidu as it launched its Fire tablet in China. Baidu will be the tablet’s default search engine and will provide it with apps. Amazon is a small player in the tablet market, which is led by Apple (AAPL), Samsung, and Chinese manufacturers.