Sun Tzu’s Art Of War tells of ‘nine situations’ an entity can find itself in; an army that enters hostile territory with the backing of fortified cities in the rear is said to be on ‘serious ground’. That is where online marketplace Amazon finds itself by soft-launching a new store through Tmall.
Amazon has opened a store with direct competitor Tmall as part of its push into the Chinese online retail market. Tmall, owned and operated by Chinese marketplace giant Alibaba, is something of a gatekeeper to an estimated 35 million cross-border online shoppers in China. In opening a store with Tmall, Amazon is making moves into the lucrative market, listing imported food, shoes, toys and kitchenware amongst its products.
“We welcome Amazon to the Alibaba ecosystem, and their presence will further broaden the selection of international products and elevate the shopping experience for Chinese consumers on Tmall,” Alibaba spokeswoman Candice Huang told the Seattle Times.
Amazon China Vice President Niu Yinghua told the Alibaba-owned news site Alizila that the Amazon Tmall store was part of a move by the US brand to “develop new sales channels, offering Tmall consumers a variety of premium imported brands and a quality life backed by Amazon”.
When the store opens officially in April, Amazon will be vending about 1000 imported products, including a number of lines from exclusive suppliers such as apparel retailer Panama Jack. Orders will be processed through Amazon’s own local fulfilment systems throughout China, which provides same-day and next-day delivery in over 1400 cities and counties, as well as around 5000 click and collect locations.
“Amazon aims to serve Chinese consumers to purchase products around the world through its platform,” added Niu.
While Amazon has become a corporate giant, much of its success is limited to American shores. International sales for the brand have slumped up to 10 percent in the past five years as competitors such as Alibaba have taken root. While Alibaba itself tends to favour businesses buying wholesale, Tmall is aimed directly at Amazon’s market of sellers marketing goods directly to web shoppers, in a market expected to break the trillion dollar barrier by 2018, according to estimates from EMarketer.
The news is a resurrection of the word “coopetition”, as outside of this development Alibaba and Amazon are just as much at each others’ throats as ever. In addition to competing in the online marketplace arena, the two brands also offer cloud storage; Amazon already operate a centre in China, and Alibaba are planning to open a cloud service in Silicon Valley.
The data centre and fulfilment services represent large investments into the Chinese e-commerce environment on the part of Amazon, and the new sales channel through Tmall represents serious ground for the US brand. On serious ground, Sun Tzu advises, it’s best to establish a steady stream of supplies; with that in mind, Amazon’s success through Tmall will hinge on how well Chinese shoppers take to its wares.