Amazon Enters E-Commerce Battle by Introducing Shopping Festival in China

Introducing the Prime Day Firesale Festival in China

After snapping up organic grocer Whole Foods, American e-commerce leader Amazon has just made another big move by introducing its major global shopping event—Prime Day—to Chinese consumers for the first time.

Originally begun three years ago to celebrate Amazon’s 20th anniversary, Prime Day, which is on July 11 this year, is an annual one-day shopping event that offers Prime members special deals on purchases. In China, it’s intended to capture the massive purchasing power of Chinese consumers.

While Chinese customers could have accessed Prime Day in the past, this will be the first time that they can participate in the festival by directly ordering from Amazon’s Chinese language site, which is easier for consumers who are not fluent in English or any other foreign language. Chinese consumers also no longer have to wait for their packages to be shipped from abroad.

Those who sign up for the Prime service in China, can get a 30-day free trial. Thereafter, the annual fee is 388 yuan, or roughly USD$57, according to the company’s Chinese website. But to sweeten the deal, Amazon is offering consumers a discounted annual rate of 188 yuan (US$28) if they sign up by November 2017. Chinese subscribers will get free shipping from Amazon stores both domestically and anywhere else in the world.

Amazon Plays Catch-Up with JD and Alibaba

For Amazon, it’s a big step towards localizing their offerings in China and strengthening its market presence in a region dominated by domestic giants Alibaba and JD.com. With the successes of Alibaba’s Single’s Day and JD.com’s 618 shopping festival, it is no secret that Chinese shoppers love these kinds of online sales events. Two weeks ago, at its 618 festival, JD.com scored a record US$17.6 billion in transaction volume.

Amazon first launched its signature Prime membership program in China last October mainly to meet the rising need for cross-border e-commerce services among China’s affluent population. On this platform, it offers various types of products that Chinese consumers like to buy, ranging from premium goods for mothers—such as milk powder and diapers—to luxury items from brands including Gucci and Kate Spade.

During the sales, Chinese customers will still be able to access a selection of deals from the Amazon Global Store, and the time difference will allow buyers in China to have a total of 46 hours to shop versus the 30 hours that shoppers in other participating countries will have, according to Amazon’s Chinese site.

While Amazon is an e-commerce leader in many Western countries, its performance in China over the past 12 years can hardly be considered a success story. Its market share has dropped significantly over the period, down from 15.4 percent in 2008 to less than one percent in 2016, according to data from the domestic research institute iResearch. In 2015, it even launched a flagship store on Alibaba’s Tmall in order to remain relevant and reach out to more Chinese consumers.

The current rise of middle-class consumers in China, who now demonstrate much more sophisticated and mature consumption habits, might offer a great opportunity for Amazon to catch up to some major domestic players like Alibaba and JD.com and improve its relevance in this huge market.

Will you be participating in Amazon’s Prime Day Firesale Festival? Tell us why or why not in the comments section below.

Categories

E-Commerce, Retail

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