(Adds Amazon comment)
BEIJING Aug 20 Amazon.com will set up
shop in China's Shanghai free trade zone, the company 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 shows an 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 give Chinese
customers access to its products from its global supply chain
and to help small and medium-sized enterprises in China to
export their products to customers in other countries, the
company said in an e-mailed statement.
Amazon did not say when the company is likely to begin
operations in the free trade zone, which enjoys more relaxed
import and export regulations than the rest of China.
The company is also pushing its Amazon Web Services (AWS)
cloud computing business in China and said in December that the
country will have its own AWS region to improve speeds for its
mainly corporate customers.
However, persistent expansion has come at a cost, leaving
Amazon with a $126 million net loss in the second quarter, up
from a loss of $7 million in the same period last year. The
company also forecast an operating loss of between $810 million
and $410 million for the third quarter to Sept. 30, up from a
$25 million loss a year ago.
"I look forward to working with our Shanghai partners to
realise the incredible opportunity of developing the best
cross-border shopping experience possible for not only customers
in China but also around the world and establishing Shanghai as
a recognized international cross-border e-commerce centre," said
Diego Piacentini, Amazon's senior vice president of
International Consumer Business.
But 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 had closed down a third-party store
after state media criticised it for selling fake cosmetics.
Amazon's 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, there has been 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
Goodman and Greg Mahlich)