In a strategic move to stay ahead in the competitive e-commerce landscape, Amazon.com has unveiled several new initiatives to assist Chinese merchants in expanding their international sales. This development comes amidst the rising influence of China-originated rivals such as Shein and Temu.
Launching innovation and expanding markets
Amazon has established an innovation centre in Shenzhen, a southern technology hub, a significant step in its Asia-Pacific operations. This centre aims to amalgamate industrial expertise and resources, aiding merchants in brand development, product promotion, and digitalising their processes. This announcement highlighted a four-day event in the city starting Tuesday.
To widen its global footprint, Amazon has also included Brazil in its network for Chinese sellers, heating the competition in Latin America. This move parallels the efforts of Shein, a fashion powerhouse, and Temu, an up-and-coming online shopping platform owned by PDD Holdings, which have both recently expanded into the Brazilian market.
Enhancing support for Chinese merchants
To attract more Chinese sellers, Amazon offers access to its comprehensive supply chain network, encompassing warehousing, distribution, and courier services. Furthermore, the company plans to upgrade its selling platform and explore the potential of artificial intelligence to streamline business processes. These efforts align with the increasing trend of products being ‘Made in China and sold on Amazon’. The company has witnessed a significant rise in the number of items sold from China and the revenue of Chinese merchants on its platform.
Cindy Tai, Vice President of Amazon’s Global Sales in Asia, highlighted the growing role of cross-border e-commerce in boosting China’s foreign trade.
Navigating through challenges
Despite its focus on cross-border e-commerce, Amazon has had to withdraw from several of its ventures in China, including its third-party marketplace, Kindle e-book service, and a local app store. The company’s renewed strategy aims to win back the confidence of Chinese sellers, especially after the 2021 crackdown on fake reviews that led to the suspension of about 3,000 online merchant accounts linked to around 600 Chinese brands.
On the other hand, Chinese competitors such as Shein, Temu, and ByteDance’s TikTok are elevating the competitive stakes. Shein, now headquartered in Singapore, has experienced a dramatic increase in its net income. Temu, having started operations in the US only in September 2022, has already seen its sales more than double those of Shein. Additionally, ByteDance has expanded its live commerce model internationally, including a significant investment in Indonesia’s largest e-commerce platform.
