Battle of the Giants?

Alibaba is making international markets a key goal, as Amazon reports an upsurge of 300 per cent of sales on its Chinese site.

According to reports on Alibaba’s news site Alizila.com, new chief executive Daniel Zhang recently said, “We will organize a global team and adopt global thinking to manage the business, and achieve the goal of global buy and global sell.”

In order to respond to the strong demands of Chinese consumers, in late 2014 Amazon.com Inc. launched a subsite, Haiwaigou, meaning “buying from overseas” in Chinese language, on its Chinese site Amazon.cn to sell products from its US site. What it meant was access to the US giant’s products, in Chinese.

According to the company Amazon.cn now sells more than 2 million products from about 30,000 international brands through Haiwaigou, Amazon says. The best-selling categories are shoes, apparel, kitchen wares, children’s products and sports goods.

China is clearly a key market for Amazon, as March 2015 saw the company open an online store in Alibaba’s market platform, Tmail. One of the challenges for foreign companies remains how best to access and communicate with Chinese consumers – reflected in Amazon’s decision to open a flagship store in Tmall.

Ebay for example entered the Chinese market in 2002 with a non-localised offering, but pulled out in 2006. While it still operates an eBay China site, operated as a wholly owned subsidiary, and recently announced a partnership with JD.com for buying and selling goods (JD.com is partners with Tencent Holdings, a major competitor to Alibaba) it clearly lost its early mover advantage.

Despite continuing efforts to tackle the Chinese market, and strong numbers to report, even Amazon still only has a small market share in the country. If Alibaba can continue its market domination as it expands globally, then rivals could be in for a bumpy ride.