Amazon sucks it up in China, opens a store on Alibaba’s marketplace

Here’s the weirdest China ecommerce news so far this year – and possibly all year: Amazon just opened up a store on Alibaba’s marketplace, Tmall. The shop (pictured above), which is currently selling a limited selection of what the Amazon China store offers, like food, women’s shoes, and children’s wear, is at Amazon.tmall.com (hat-tip to the Wall Street Journal for spotting this).

Amazon’s China website has long struggled in the country, trailing behind Alibaba’s two marketplaces (Taobao and Tmall) as well as other homegrown rivals like JD and Suning. Amazon was China’s eighth biggest estore at the end of 2014, with just 1.3 percent market share of transaction value, according to data from iResearch. Tmall dominates the market with 57.6 percent market share.

See: Alibaba reaches 334 million shoppers who spent $126 billion in Q4

Great mall of China

It’s an awkward but inevitable situation for Amazon. It’s as if Amazon opened up a huge shop on the wrong side of town and then had to suffer the indignity of opening up a branch in Alibaba’s crowded shopping mall where there’s much greater foot traffic.

This move means Amazon is effectively an Alibaba customer and has to pay a commission for each sale that occurs in the Tmall outlet.

A number of major brands and retailers use Tmall for their flagship stores, even though many have their own standalone ecommerce sites in China. Other online retailing companies have opened up stores on Tmall before, such as Walmart’s Yihaodian.

(Source: Wall Street Journal)