Amazon.com, Inc. (AMZN) China Code Waiting to Be Broken

Amazon.com, Inc. NASDAQ:AMZN

Amazon.com, Inc. has been in China for ten years now. But success has been elusive all along. Jeff Bezoz knows that without a meaningful toehold in the world’s biggest and fastest growing consumer market, his global ambitions will always be incomplete. That probably explains why Amazon tweaked its China strategy this year.


Alibaba fuels Amazon China growth

Amazon’s China unit recently issued a report that pointed to significant growth this year and an even better forecast for 2016. But surprisingly, not much of that growth is tied to its Amazon.cn platform. Rather, a large number of consumers in China are flocking to the firm’s global site to buy goods that will be shipped to them from the U.S. That’s how Amazon in making inroads in China. And how did this sudden change in fortune come about? Increased marketing by the U.S. site was an important factor. But what likely turned the tide was Amazon’s decision to open a store on rival Alibaba Group Holding Ltd ’s Tmall that features foreign brands selling to Chinese consumers.

Analysts bill cross border commerce as the next big thing in retail. Amazon is making major investments in global supply chain infrastructure, technology and marketing, in a bid to grab a big chunk of cross-border commerce. In this whole new world, most of the old rules that governed retail operations have become defunct. “It is now critical to not “think globally and act locally” but to “think globally and act globally” to make 3-4 billion, rather than 300-400 million, people your customers,” China specialist, Michael Zakkour, wrote in Forbes.

Amazon Home Dominance Just Got Stronger

Amazon.com, Inc. has always been very tight lipped about its user base. As such, only reliable data sources are the consumer surveys conducted by reputed brands. One such well regarded poll, the CNBC All-America Economic Survey, last week showed just how big a hold Amazon has over U.S. online shoppers.

The survey revealed that a whopping 40% of U.S. adults browse through Amazon “always” or “most of the time” when online shopping. And what’s even more striking is the conversion rate, or the number of site visits that result in a buy. Close to 50% of Americans searching Amazon actually make a purchase.

And what do shoppers value most in their Amazon experience?

“The level of security for personal information” ranked highest, followed closely by price. Interestingly, according to the survey, the least important of Amazon’s attributes was its much touted Prime membership program!

Shares of Amazon.com, Inc. are currently trading around the $640-mark. The stock is up 107% year to date.

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