By Chris Chang, posted Oct 28, 2011 at 6:57 PM, 690 views,

Amazon Is Putting All Its Focus On The Chinese Market

When you think of Amazon you will think e-commerce and Kindle. Today, Amazon is going to expand its business in China. The company is reportedly talking to the Chinese government about selling its Kindle products in the country, and they are not only concerned with the speed to the Chinese market but also with Chinese user needs. And guess what, the company also rolled out a significant change to its Chinese site.

The “New” Amazon Chinese Site

First, let’s talk about Amazon’s “new” Chinese site. Recently, Amazon announced a new name for its Chinese operation and a shorter domain address. Here’s one thing you may not be aware of. Amazon.com Inc, the world’s largest e-commerce company by market share, gained entry into China by purchasing local e-commerce website Joyo in 2007 and had been labeled “Joyo Amazon” in the Asian country ever since. But the company dropped “Joyo” from its name today, so the former Joyo Amazon is now Amazon China.

And perhaps the most interesting thing is that Joyo was actually created in 1999 by Lei Jun – the CEO of Xiaomi. Joyo was sold it to Amazon for US$75 million. Here are more details, according to Lei Jun,

“In January 1999, I established a small department within JinShan (a Chinese anti-virus vendor) and began to experiment with the internet. My first idea was for Joyo to be a downloads site. The next idea was for e-commerce. In May 2000, I set up the independent company Joyo, firstly to sell movies, but that soon extended to books. It then became China’s leading [B2C] e-commerce site. In September 2004, it was sold to Amazon. Joyo shall forever remain in my heart. Best of luck to Amazon in China.”

Interesting huh? Besides changing its name, Amazon also pointed a much shorter URL http://z.cn to the the official website of Amazon China. So, you can just type z.cn to visit Amazon China to purchase stuff. Today, Amazon China has 28 product categories, containing 2.6 million commodities. More than 50 percent of the company’s revenue comes from electronics and general merchandise, which mainly rely on delivery from fulfillment centers. Here’s one more thing, Amazon.cn reported a daily order of 10,000 copies of Steve Jobs Biography on October 5.

Amazon Introducing Kindle Devices in China

Amazon’s new Kindle devices — the Kindle Fire, the Kindle Touch 3G, the Kindle Touch and a new lighter, smaller Kindle — are all going to make a China debut soon. According to a report from local media Sohu, Amazon’s Kindle products are under discussion with regulators over copyright issues. The firm’s global vice president, Marc Onetto, is reportedly actively negotiating with Chinese officials about introducing both Kindle e-readers and the Kindle Fire tablet in China. Here’s what Onetto told Sohu,

“We hope to launch products in China that are simple and user-friendly. If there are too many vendors participating, the product will become very complex. We are not only concerned with the speed to market in China but also with user needs,”

Well, there is no word on when a deal is expected to be reached, and Onetto didn’t say if the company was working with local retailers to sell its e-readers and tablet or if they would just be offered online. However, he did specify that the company has no plans to work with local content providers. What’s more, Onetto recognized China’s importance to his company. According to Sohu’s report, he noted that China is Amazon’s fastest-growing market, with revenues rising by 80 percent. The country is second only to the U.S. in sales.

So, here’s the question, will Amazon’s Kindle devices make their China debut successfully? Maybe not. There are a few hurdles that Amazon faces before its products can make their China debut. First, they must gain both government approval and legal rights to content. Amazon will not get approval for Kindle in China without abiding by China’s laws, and there’s also a lingering question as to how much of that content the Chinese government would censor. If Kindle is going official in China, future China Kindle users should either hope they can use a VPN on it or accept only partial access to the global Internet. Second, there’s a Kindle knockoff in China.

Kindle Knockoff

There’s a lot of iPhone knockoffs in China. I’m sure duplicating the Kindle was much easier than the iPhone. Since the largest online readership is in Chinese and the Kindle, amazingly, is unable to handle Chinese fonts even in PDF files, this “rip off” is in fact a most welcome innovation in the country. Named the Wefound, the device looks nearly identical to the Kindle except for the tiny navigation jog wheel. The device uses E Ink Corp’s electronic paper for the display and users will be able to input content via a SIM card. The Wefound is priced at 700 yuan ($110), and seriously, this is not the only Kindle knockoff in China. There are tens to hundreds of Kindle knockoffs in the country, with prices ranging from 300 yuan – 800 yuan ($47 – $126), so we think the Amazon Kindle may face difficulties on the sales in China. However, the Kindle Fire may be a big hit in the country, since there’s no knockoff for the tablet yet.

The Opening of Amazon’s Latest Operation Center in China

Although Amazon hasn’t been granted government approval to sell Kindle devices in China yet, the company recently announced the opening of its latest order-fulfillment center in Kunshan, Jiangsu province. The new center, the largest in the country and situated near Shanghai, occupies a space of more than 120,000 square meters, making it the company’s largest fulfillment center outside the United States. Here’s what Marc Onetto, senior vice-president at Amazon Worldwide Operations, said,

“We will consider opening more fulfillment centers in China next year, while also expanding our current ones,”

What’s more, according to Onetto, Amazon hopes to provide Chinese customers with even faster delivery times than those seen in the US, because of the intense competition from Chinese e-commerce websites such as Taobao.com and 360buy.com. And most importantly, Chinese customers demand swifter delivery times when shopping online because of the fast pace of life in the country. Customers in Shanghai and the surrounding provinces of Jiangsu, Zhejiang and Anhui will have access to a greater selection of products and faster delivery times now the new center is open. The facility will allow for a later cut-off time for same-day delivery to cities such as Shanghai, Suzhou, Wuxi, Shaoxing, Jiaxing and Hangzhou. Here’s what Wang Hanhua, president of Amazon China, said,

“Chinese customers care greatly about when they can receive their orders, so we expect 70 percent (of Amazon orders) to arrive on the same, or next, day,”

At the meantime, Amazon already has 10 distribution centers in China, adding up to a total of 400,000 square meters of warehouse space, which is about a third of the warehouse space Amazon has in the United States. Man, we think Amazon is really putting all its focus on the Chinese market.

Source: TechWeb, PCMag, China Daily