US e-ecommerce giant Amazon will set up operations in Shanghai's free trade zone and also signed an agreement to give Chinese customers access to products from its global supply chain, the company said Wednesday.

"Amazon also will open a logistics warehouse to expand exports of goods from China," Shanghai municipal authorities said in a statement.

"We're going to have lower shipping charges and faster deliveries into the free trade zone so there are going to be many benefits," said Diego Piacentini, vice-president of Amazon's international consumer business.

Wang Xiao, the CEO of Innospring, is optimistic about Amazon's plan.

"Amazon has its great advantage in e-commerce sales and logistics. And it is very politically wise to get behind a project that officials are supporting," she told China Daily.

Wang also said that although Amazon had been operating in China for a decade, it still needs to pay attention to branding itself in China's market when competing with other local e-commerce giants like Alibaba and Jingdong.

"It will be a benefit for Chinese customers by providing them access to international merchandise and more choices when purchasing goods," said Wang.

"The aggressive plan of Amazon to jump into the Chinese market will boost competition against local rivals including large companies like Alibaba and smaller cross-border e-commerce groups," said Wang.

"The competition will absolutely become fiercer than before after Amazon announced its plan," said Kong Dehai, secretary-general of US-China Association of High-Level Professionals (UCAHP), adding that Amazon's success will depend on tax policies and prices.

Amazon originally entered China in 2004 by acquiring shopping website Joyo.com, and renamed it as Amazon.cn in 2007.

Since launching last year, the Shanghai cross border e-commerce pilot platform has already attracted 32 large overseas companies and more than 10,000 kinds of merchandise, according to 36kr, a Silicon Valley, California-based high-tech media.

The Shanghai Free Trade Zone, officially called China (Shanghai) Pilot Free Trade Zone, began in 2013. It is the first free trade zone in mainland China. The zone covers an area of 29 square kilometers and integrates four existing bonded zones in the district of Pudong .

zilian@chinadailyusa.com

(China Daily USA 08/22/2014 page2)