After successfully launching the Kindle store on Tmall in 2014, it looks as if Amazon has gained the confidence to open a larger store on the e-tailer platform. Amazon’s new Tmall store sells women’s shoes, toys, kitchenware, food and wine, with promises to carry luggage and bags in the future.
Amazon has been struggling to gain market share in China since its entry ten years ago. As of now, Amazon conducts less than 2% of all B2C sales whereas market leader Tmall’s accounts for 52%.
Amazon is not the only B2C e-tailer to operate stores on Tmall; it is one of 87 independent B2C e-tailers selling on Tmall. Local players Dangdang, Gome, and Yihaodian joined prior to 2013. Global wholesaler Costco follows suit and started selling on Tmall in October 2014, just in time for the biggest online shopping festival Single’s Day. Costco achieved RMB 40 million in sales for its first month. Online commenter said “Amazon’s pricing on Tmall is not that low, 100 grams of dry blueberries is sold for RMB70-80 with no promotions, which is much higher than when Costco joined Tmall.”
Online commenters praised Amazon for not being afraid to lose face to its local competitor, and prioritizing profits over pride. They believe other prestige brands can no longer use preserving reputation as an excuse to avoid the platform. “Amazon is a global e-commerce guru after all.” they said.
But it looks like Amazon is not a guru in China – yet. A search for Amazon in Chinese does not bring up the store because it is listed in English – a common SEO/SEM mistake made by international players.
Tmall has played a strategic role in domestic and global e-tailers’ success in China. Amazon has adopted local e-commerce practices and participated in price wars and aggressive marketing in the recent years, and is now making a bold move to show its dedication to growing the Chinese market. The rumors are the second biggest player with a market share of over 20%, Jingdong, might follow the trend.
For more on brands on Tmall, download a copy of our China Luxury report: