Amazon is making a push to acquire more sellers in China, aiming to expand its offerings of affordable products in the US and elsewhere to take on Temu and other Chinese competitors.
At the end of July, Amazon held an event for online sellers in Shenzhen, Guangdong Province, telling them it would support their efforts to enter the global market.
As examples of past successes in China, Amazon cited Anker, which makes chargers for smartphones and other devices, and robot vacuum cleaner manufacturer Roborock, both of which expanded around the world.
Amazon has been scaling back its consumer-oriented businesses in China. The company ended its domestic e-commerce service in China in 2019, and recently shut down its Kindle e-book service. It continues to provide cross-border e-commerce for overseas products to Chinese consumers, but its presence is weak.
Recently, however, Amazon has been reevaluating China as a source of goods for selling outside the country and is cultivating sellers there.
This year, it opened new offices in the inland cities of Wuhan, Hubei Province, and Zhengzhou, Henan Province. They support sellers in nearby cities and surrounding areas, seeking to do new business with small- and medium-sized sellers such as factories in rural areas.
For companies lacking the know-how to export overseas or develop their brand, the offices can help them by using Amazon’s logistics network and other resources to sell their products worldwide.
Amazon’s official account on the social networking app WeChat is also working to recruit sellers, holding live seminars almost every day for people considering listing products. “In 2024, we will hold dozens of events for thousands of sellers,” Amazon China’s vice president told Chinese media in May.
The company will also begin building a framework to deliver Chinese products to the US at lower prices. It has been signing new contracts with Chinese retailers from this summer that allow inexpensive daily necessities and clothing to be shipped directly to US consumers, according to The Information and other US media. Previously, deliveries were made via Amazon’s logistics facilities, but shipping directly is expected to reduce costs.
Amazon is rushing to develop sellers in China over concerns that its presence in the US and elsewhere could decline in the face of rising low-cost online shopping services from China like Temu and Shein.
According to a survey of 1,000 US consumers conducted by Jungle Scout, an analytics service for sellers, 52% of people said they first searched for products on Amazon when shopping online in April to June, down nine percentage points from two years ago.
Sales from Amazon’s direct online shopping business grew 5% year-on-year in the April-June period, slowing from a 7% rise in January to March.
In 2023, US consumers spent 11 minutes a day using the Amazon app, according to US research firm Global Wireless Solutions. Temu consumers, on the other hand, spent 22 minutes a day using its app, which draws interest by frequently issuing coupons.
At an earnings briefing on August 8, Amazon CEO Andy Jassy acknowledged that consumers continue to seek low-priced goods.
China is becoming increasingly important as a supplier of of low-cost goods—a trend that benefits Chinese sellers, who can lift sales through exports amid sluggish domestic demand.
Cross-border e-commerce exports in 2023 amounted to USD 261.7 billion, up 180% from 2018, according to China’s General Administration of Customs. The US was the most common destination, accounting for 37%.
Chinese internet companies like Temu, Alibaba Group’s AliExpress and ByteDance subsidiary TikTok are expanding their cross-border e-commerce businesses by utilizing the networks of business partners they have cultivated domestically, boosting export values.
Amazon is not the only foreign company aiming to expand its listings from China. Shopee, from Singapore-based Sea, is also streaming seminars on WeChat in an effort to attract Chinese sellers interested in expanding into Southeast Asian markets, where it has an advantage.