SHANGHAI - US online seller Amazon announced Thursday it will increase
its investment in Joyo.com, one of China's leading online shopping websites,
according to an AFP report.
The founder and CEO of Amazon, Jeff Bezos talks to the press
during a news conference in Shanghai. US online seller Amazon said
Thursday it will increase its investment in Joyo.com, one of China's
leading online shopping websites.[AFP]
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"This is our fastest-growing
business anywhere in the world ... we are considering investing even more in
this business," Jeff Bezos, chief executive of Amazon, was quoted by the
report as saying.
But he did not provide any specific figure.
Loss-making Joyo has been growing fast since Amazon bought the Chinese
company for 75 million dollars in 2004, with the products it sells increasing 32
times since then.
Bezos said the contribution of China, the world's fourth largest economy, to
Amazon's revenue should reflect its double-digit economic growth.
Amazon currently achieves 54 percent of its sales outside the United States.
"The percentage of sales should reflect (China's growth)," Bezos said at a press
briefing.
"It's an achievable goal that China will become our fourth largest market in
the world ... It's a long-term investment and we have the resources and
patience."
Amazon said experience showed it took five to seven years to become
profitable in a new market.
However, the Joyo unit still lags behind local player Dangdang.com, its main
rival in China.
In the first quarter of 2007, Dangdang has a share of 18 percent of China's
"business to customer", or B2C, Internet retailing market, compared with 12
percent for Joyo, according to Analysys International, a Beijing-based
technology consulting firm.
Bezos acknowledged the problems foreign Internet companies might meet in
China and said Amazon would avoid them.
"One of the mistakes that many American companies could make is that when
they come to China and hire management team in China, the Chinese leader sees it
as his or her job to make their boss happy in America instead of making their
customers happy in China."
"We are not going to make that mistake," Bezos said.
The key advantage of Dangdang, which is also in red, is that its product
selection is a bit wider than Amazon, Song Xing, analyst with Analysys
International said. "But to be frank, I don't think the gap is that large."
He said China business-to-consumer, or B2C, industry was hampered by the
country's underdeveloped logistics industry and the ubiquity of pirated
products.
"But I'm still very optimistic about the B2C model," Song said, citing the
potential for B2C websites in product categories such as books, where retail
customers need easy access to a wide selection of a reliable quality.
"But I'm still quite optimistic about the B2C model especially in some
particular category like books," Song said.
The transaction value of China's B2C market totalled 1.02 billion yuan
(US$133 million) in the first quarter, compared with 854.3 million yuan a year
earlier, according to Analysys International.