An Amazon subsidiary plans to sell on an Alibaba online marketplace
January 12, 2015 11:59 AM
Amazon.com Inc.’s China subsidiary competes directly against Alibaba Group’s big online marketplaces in China, and Alibaba’s record $25 billion IPO in September spurred speculation that the Chinese e-commerce giant might one day challenge Amazon in the United States. But that apparently isn’t stopping Amazon from using Alibaba to sell baby goods to Chinese online shoppers.
Diapers.com, one of 10 e-commerce sites operated by Quidsi, which Amazon purchased in 2011 for about $500 million, has applied to sell on Tmall Global, Alibaba says. Tmall Global is an online shopping mall Alibaba launched in February 2014 to make it easier for foreign brands and retailers that don’t operate in China to sell online to Chinese consumers.
Amazon and Diapers.com declined to comment on plans for the Tmall Global store.
Diapers.com is one of than 100 overseas retailers applying to open stores on Tmall Global, Alibaba said in a statement this month. Also on the list is Metro AG, a German consumer electronics retailer that exited China two years ago after two years of operations.
Diapers.com began last year shipping items in some major categories to shoppers in China, including formula milk and car seats. Diapers.com says shipping to China normally takes five to 12 days.
There are indications Chinese shoppers have responded. China accounts for 12.3% of traffic to Diapers.com, making it the second-largest country in terms of traffic to the site, after the United States, according to Alexa, an Amazon unit that tracks web site traffic.
Many Chinese parents buy online, and they often seek foreign brands deemed safer and of higher quality. Half of parents in 27 large Chinese cities have purchased children’s products online, and 20.7% have bought baby formula on the web, making it the second-leading shopping channel for that product after children’s specialty stores, according to U.K.-based research firm Kantar World.
Tmall Global lets foreign companies sell online in China, even if they do not hold a license to do business in China. 5,400 retailers from 25 countries have opened stores on the new shopping portal. Total sales increased 10-fold from Tmall Global’s first month of operation, the company says, though it has not disclosed sales in dollars.
Amazon ranks No.1 in the Internet Retailer 2014 Top 500 Guide and Amazon.cn is No. 4 in the 2014 China 500. Alibaba’s Taobao and Tmall online marketplaces account for about 80% of online retail sales in China, but they are not ranked in the China 500 because they, like eBay.com, host other shops and do not sell merchandise themselves.