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August 21, 2014

Amazon steps up Chinese e-commerce presence

Free trade deal follows expansion into India last month.

By Vinod

Online retail giant Amazon has announced plans to bring millions of its products to Chinese shoppers following the signing of a new free trade partnership in the country.

The company has announced that its Chinese branch, which celebrates ten years in the country this year, has signed a memorandum of understanding with the Shanghai Free Trade Zone (FTZ) and Shanghai Information Investment Limited (SII).

This means it will be able to set up a base to run its operations, including a logistics and warehouse centre, in the FTZ, where restrictions on foreign investment are limited, and will also begin to sell products from small and medium-sized enterprises in China to Amazon customers across the world.

Speaking to the BBC, Amazon China’s president Doug Gurr said: "We seek to be the most customer-obsessed on-line shopping platform with vast selections, competitive price and most convenience in China.

"Today’s partnership announcement with FTZ and SII will help Amazon further realise our vision."

The company has declined to comment on how much it will spend to set up business in the Shanghai zone, but it comes at a time when Amazon is investing heavily in its own growth as it looks to take on major rivals such as Alibaba and JD.com.

The Chinese launch is Amazon’s second such deal in recent weeks, following the news last month that the company will invest over $2bn in the Indian ecommerce market.

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The company launched its Indian website last June, with the country earmarked by Amazon chief executive Jeff Bezos as a key target market, but has so far struggled to exert its usual dominance in the face of significant local competition.

Under the new investment, Amazon will build five new warehouses in India, nearly doubling the company’s available storage capacity in the country to half a million square feet.

 

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