Amazon China uses Prime to promote imported goods in China
January 26, 2017 01:13 PM
Chinese consumers covet imported goods, and the China unit of Amazon.com Inc. is using its newly launched version of the Amazon Prime loyalty program to promote its shopping portal devoted to goods from overseas.
That portal, called Haiwaigou, which means “buy from overseas” in Chinese, features more than 10 million items from Amazon’s U.S. e-commerce site, and since last year from its U.K. site, along with product descriptions and customer service in Chinese.
Amazon says sales on the Haiwaigou section of Amazon.cn doubled during its 2016 Black Friday promotion over the same sale a year earlier and were five times larger than its sales on Singles’ Day, the big online shopping holiday in China that occurs every Nov. 11.
Amazon launched Haiwaigou in 2014, and it competes with other big shopping sites devoted to imported goods, including the Tmall Global marketplace operated by Alibaba Group Holding Ltd. and the JD Worldwide portal operated by JD.com Inc.
Amazon is seeking an edge by tying its Amazon Prime loyalty program in with its imported goods website. Amazon launched Prime in China and promises free delivery of Haiwaigou orders above 200 yuan ($30) to Prime members, as well as free shipping on all domestic orders. Consumers pay 388 yuan ($58) per year to join Prime.
Amazon doesn’t provide country-specific figures on Prime membership, but its China unit said recently that there already are Prime members in 380 cities or villages and that 90% of Prime members in China say they are likely to recommend the service to their friends. Prime users also tend to spend more money and buy more often than other customers, Amazon China says.
Amazon China says 80% of Haiwaigou shoppers are younger than 35 and 84% of them have children. But consumers over 60 are more likely than other age groups to place orders with a value more than 5,000 yuan ($750).
Chinese consumers mainly shopped Haiwaiguo in 2015 to get better prices, but in 2016 rated quality as important as price, Amazon China says. Men who shop the imported goods portal are more price-conscious than women and often shop on Haiwaigou after visiting consumer-advice websites. Female consumers think about more quality and more than 60% of women say they selected Haiwaigou based on suggestions from friends and family members, Amazon China says.
Top categories on Haiwaiguo are apparel, shoes, maternity and children’s products, cosmetics, kitchenware, toys, personal care products, computers, sporting goods and watches, according to Amazon. The new two-child policy in China and increased demand from women for quality products are driving demand for imported children’s products and cosmetics, Amazon China says.
Here are the best-selling brands on Haiwaigou in 2016, according to Amazon China:
- Calvin Klein
- Tommy Hilfiger
JD.com is No. 1 in the Internet Retailer China 500, which ranks online retailers by their sales in China, and Amazon China is No. 4. While Alibaba accounts for a majority of online retail sales in China it is not ranked in the China 500 because it is a marketplace where other retailers sell and does not sell merchandise on its own account.