Amazon set to ring the changes in Chinese e-commerce market
Updated: 2011-10-28 08:04
By Tuo Yannan (China Daily)
The office of Amazon.com Inc in Beijing. The company announced the opening of its latest order-fulfillment center in Kunshan, Jiangsu province, on Thursday. [Provided to China Daily]
SHANGHAI - Amazon.com Inc, the world's largest e-commerce company by market share, on Thursday
announced the opening of its latest order-fulfillment center in Kunshan, Jiangsu province.
The company expects to double the total area of its fulfillment centers in China next year to compete with its domestic rivals in the world's largest Internet market.
The new center, the largest in the country and situated near Shanghai, occupies a space of more than 120,000 square meters, making it the company's largest fulfillment center outside the United States.
The total area of Amazon's fulfillment facilities in China was only 14,000 sq m in 2004, when it bought the Chinese company Joyo.com. That has now been increased to 400,000 sq m.
"We will consider opening more fulfillment centers in China next year, while also expanding our current ones," said Marc Onetto, senior vice-president at Amazon Worldwide Operations.
According to Onetto, Amazon hopes to provide Chinese customers with even faster delivery times than those seen in the US, because of the intense competition from Chinese e-commerce websites such as Taobao.com and 360buy.com.
Amazon held a 2.9 percent share of China's business-to-customer (B2C) market in the third quarter of this year, compared with 2.3 percent in the second, according to the domestic research company Analysys International.
"Following the merger with Joyo.com, Amazon has seen the fastest rate of growth in China among B2C companies in the last two quarters, more than 40 percent," said Ding Jiaqi, an analyst with the Beijing-based IT research company IResearch Consulting Group.
Onetto said that Chinese customers demand swifter delivery times when shopping online because of the fast pace of life in the country. Customers in Shanghai and the surrounding provinces of Jiangsu, Zhejiang and Anhui will have access to a greater selection of products and faster delivery times now the new center is open.
The facility will allow for a later cut-off time for same-day delivery to cities such as Shanghai, Suzhou, Wuxi, Shaoxing, Jiaxing and Hangzhou. "Chinese customers care greatly about when they can receive their orders, so we expect 70 percent (of Amazon orders) to arrive on the same, or next, day," said Wang Hanhua, president of Amazon China.
Also on Thursday, Amazon announced a new name for its Chinese operation and a shorter domain address. The former Joyo Amazon is now Amazon China and its shortened domain address, z.cn, will link to amazon.cn, the official website of Amazon China. Both moves are intended to further transform the company from a local online bookseller into a unit of the mammoth US online merchandiser.
Amazon China has 28 product categories, containing 2.6 million commodities. More than 50 percent of the company's revenue comes from electronics and general merchandise, which mainly rely on delivery from fulfillment centers.