BEIJING Aug 20 Amazon.com will set up
shop in China's Shanghai free trade zone, state media said on
Wednesday, aiming to take advantage of less stringent trade
regulations to sell a wider range of products in the country.
The U.S. online retailer's move signals its intent not only
to remain in China but to beef up its presence in an e-commerce
market dominated by Alibaba Group Holding and
Beijing-based JD.com, the second-biggest player.
Amazon signed a memorandum of cooperation "to develop
cross-border e-commerce in the Shanghai free trade zone", state
news agency Xinhua said, adding that the company will use the
zone to expand its import business through the introduction of
"Amazon's full global product line into the Chinese market".
Xinhua did not say when the company is likely to begin
operations in the free trade zone and Amazon representatives in
China and the United States were not available for immediate
comment by telephone or email.
The company is also pushing its Amazon Web Services (AWS)
cloud computing in China and said in December that the country
will have its own AWS region to improve speeds for its mainly
However, persistent expansion has come at a cost, leaving
Amazon with a $126 million loss in the second quarter. The
company also forecast an operating loss of between $810 million
and $410 million for the third quarter to Sept. 30, representing
a sharp increase from its $25 million loss a year earlier.
"Amazon must seize this strategic development opportunity"
in the Shanghai free trade zone, Xinhua quoted Amazon's senior
vice president of International Consumer Business, Diego
Piacentini, as saying.
Amazon has also been hit by counterfeit goods that
frequently plague companies in China, from fashion to
pharmaceuticals and even food and drink.
In March Amazon said it will strengthen regulation of its
online sales channels and that it had closed down a third-party
store after state media criticised it for selling fake
Amazon's reported move to the free trade zone comes nearly a
year after the zone was launched, attracting attention from
overseas businesses and hailed as one of China's boldest reforms
in decades. However, that hype has cooled amid a lack of
specific policy details since the initial fanfare.
Foreign banks, such as Citigroup and HSBC Holdings
have set up branches in the zone, but many foreign
companies have been reluctant to follow suit, citing a lack of
clarity on what will and will not be allowed in the zone.
(Reporting by Paul Carsten and Sui-Lee Wee; Editing by David