[photopress:jeff_bezos_1.jpg,full,alignright]Amazon.com, the world’s biggest online retailer, will increase its investment in China, the company’s fastest-growing market as well as the largest Internet market after the United States.
Amazon.com bought the Chinese Internet company Joyo.com three years ago. Now CEO Jeff Bezos has announced Amazon.com intends to pour more capital into expanding its China operations but ducked providing exact figures.
Is the Joyo purchase working? Sort of but the local competition is still leading the way. Since Amazon.com bought the Chinese company for $75 million in 2004 it has, it is claimed, widened the produced it offers by a factor of 32 times.
In the first quarter this year, Joyo ranked second in the local online retail market with a 12% share, behind Dangdang.com, with 18%, according to Beijing-based researcher Analysys International.
Analysys International also said sales in China’s electronic commerce market may more than triple to RMB18.83 billion ($2.5 billion) in 2010, from RMB5 billion in 2006.
Originally launched as an online bookstore in 2000, Joyo offers customers products in 20 categories.
COD (Cash on Delivery) delivery to more than 330 cities in China and same-day delivery to customers in Beijing, Shanghai and Guangzhou.
Joyo will now be known in China as Joyo Amazon instead of Joyo.com.
Free shipping for all Joyo orders which previously was only available for purchases of more than RMB99 (about $13.)
Joyo opened its latest fulfillment center in Guangzhou May, which will primarily serve customers in southern China. Joyo also operates fulfillment centers in Beijing and Suzhou.
Bezos’ Beijing visit came amid increasing competition in the Chinese Internet sector, which already boasts the second biggest user population in the world. Big foreign Internet companies such as Google and eBay have been struggling to keep pace with smaller local rivals that have been more nimble in addressing the peculiarities of the Chinese market.
Jeff Bezos acknowledged the problems foreign Internet companies might meet in China: ‘When they come to China and hire a management team in China, the Chinese managers see it as their job to make their American bosses happy, instead of trying to keep their Chinese customers happy.
‘We are not going to make that same mistake.’
Amazon.com will use its additional investment in Joyo to expand the online retailer’s product inventory and warehouses, and to hire more bicycle-riding delivery people. Joyo uses the bicyclists to skirt automobile traffic on the crowded streets of Beijing and other major Chinese cities.
Jeff Bezos said Joyo remains in an ‘investment phase.’ He likened the market to the U.S. Internet market when he founded Amazon.com 12 years ago and said experience shows it can take five to seven years to become profitable in a new market.
Source: Beijing Review
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