Amazon introduces its lending service in China
Amazon (AMZN) has launched its small-business lending service in China, according to a report from CNBC. The company has partnered with Chinese lenders to extend small loans to merchants that sell on its marketplace, the report says.
Merchants will be able to use the Amazon loans to build their inventories and promote their listings on the Amazon marketplace.
The launch of the lending service in China sees Amazon opening a new competition front with Alibaba (BABA) and Tencent (TCEHY) in their home market. Alibaba extends small loans to businesses and consumers in China through its Ant Financial subsidiary. On its part, Tencent provides access to small loans through its WeChat platform, which doubles as both a messaging and a financial services app.
Tencent and Walmart (WMT) are investors in JD.com (JD), one of Amazon’s e-commerce competitors in China and overseas. Amazon is preparing to shut down its domestic marketplace in China in July to allow it to focus on cross-border commerce in the country. If Alibaba and JD thought that Amazon’s decision to pack up its domestic marketplace in China meant that it was surrendering in the country, its launch of the merchant lending service will serve as a reminder that it’s merely shifting the competition rather than removing it.
Amazon extends $1.0 billion in loans to American merchants
Amazon launched its business-lending program in 2011 and has been extending small credit to businesses in the United States, the United Kingdom, and other countries ever since. By 2017, Amazon had extended more than $3.0 billion in loans to over 20,000 small businesses. Amazon extended more than $1.0 billion in loans to small businesses in the United States in 2018.
Amazon’s revenue rose 17% year-over-year to $59.7 billion in the first quarter.