How a Chinese startup became a top seller on Amazon.com
October 3, 2015 12:01 AM
After spending several years in the United States, Steven Yang came to the realization that Chinese manufacturers had a great opportunity to sell directly to U.S. consumers through online marketplaces like Amazon.com.
So Yang, who had earned a master’s degree at the University of Texas and then worked as a senior engineer for Google Inc. in Silicon Valley, returned to his native China and created Ocean wing e-commerce Co. Ltd in 2011. His plan was to sell the company’s own tech gear products, under the Anker brands, via the web to consumers in developed markets, such as the United States and Europe.
Four years later, Anker is a top brand on Amazon’s marketplace in some categories. For example, a search for “portable charger” on Amazon.com puts Anker’s product at the top of Amazon’s organic search results, with Amazon’s “#1 best seller.” The consumer feedback score for Anker’s store on Amazon is 4.9 out of 5.0.
Yang, 33, says his company booked more than $100 million in worldwide revenue last year and expects to grow another 50% this year. He’s aiming to take the company public in 2017.
How has this Chinese company made its name with U.S. consumers? Product quality is one reason, says Anker vice president Gao Tao during an interview with Internet Retailer at the company’s office in Shenzhen in southern China.
“We have more than 100 engineers working in product development department,” Gao says. “Many of them have work experience at leading international hardware companies, including Huawei, Siemens and JBL. That ensures that Anker always uses leading technology and advanced technology standards when producing our products. For example, our supplier of battery cells is Panasonic. They also supply batteries to Tesla.”
Gao says Anker has also developed technology to collect data about customer reviews and price changes on Amazon.com. “That data helps our product managers to know where the problem is in some products,” he says, “and to forecast which product will be in the greatest demand in the future.”
That consumer research helps Anker tweak its old products and introduce new ones quickly. In the past six months, Anker says it has introduced about 150 new products, and it is selling out of its inventory for new products typically in less than two months.
Anker is also expanding from online to offline. For example, Staples Inc., the biggest office suppliers chain in the United States and No. 4 in the Internet Retailer 2015 Top 500 Guide, has begun selling Anker’s products in its stores, Anker says.
And while Anker’s initial focus was on selling to Western online consumers, it’s now entering China’s booming e-commerce market by opening storefronts on China’s two biggest online shopping portals, Alibaba Group’s Tmall.com and JD.com. JD.com, which like Amazon both operates a marketplace and sells goods that it owns, is No.1 in Internet Retailer China 500. Alibaba’s Tmall and Taobao marketplaces are not ranked, because Alibaba, like eBay, is a pure marketplace and is not the seller of record. However, Alibaba’s marketplaces account for about 80% of online retail sales in China.
Amazon.com is No.1 in the top 500 Guide.