Amazon.com Inc. this week named its former China Kindle leader, Zhang Wenyi, as its new president of Amazon China. Current president Douglas Gurr will take over as president of Amazon’s United Kingdom business unit after a transition that may last several months, Amazon says.
Amazon China also said Chinese household appliances retailer Gome Electrical Appliances Holding Ltd. has opened a store on Amazon China’s e-commerce site, Amazon.cn, that will sell more than 5,000 electronics products, including refrigerators and TVs, from about 70 brands.
Gome, No. 5 in the Internet Retailer 2016 China 500, also sells products through its 1,800 consumer electronics stores in China and e-commerce site Gome.com.cn.
Gome will fulfill Amazon.cn orders via its own logistics network, Amazon says. The service is available initially only in Beijing but will expand to Shanghai and Guangzhou this year.
The agreement between Gome and Amazon China appears to be a response to an alliance announced in August between Gome’s major competitor, Suning Appliance Co. Ltd., No. 2 in the China 500, and China’s leading e-commerce operator, Alibaba Group Holding Ltd. In that deal, Alibaba spent $4.6 billion for a nearly 20% stake in parent company Suning Commerce Group, which sells online and through 1,600 stores.
Prior to joining Amazon in May 2013, Zhang, the new president of Amazon China, worked for Intel Corp. for 20 years. Amazon says one of her principle achievements since joining the e-retail giant was spearheading the launch of Amazon’s Kindle e-book readers in China in 2013. She also worked with more than 600 Chinese publishing companies to make 300,000 Chinese-language books available on Kindle devices. China has become the second-largest market for Kindle devices after the United States, according to Amazon.
Gurr has helped Amazon China reposition itself in the last two years to focus on cross-border e-commerce, “including selling global brands in China and selling China’s products globally,” Amazon’s senior vice president, worldwide, Diego Piacentini said in a statement.
Amazon and such rivals as Alibaba and JD.com, No. 1 in the China 500, have launched online marketplaces in recent years to take advantage of China’s rules that have made it easier for Chinese consumers to buy products from overseas websites without paying onerous duties. (Those cross-border rules have changed recently, however.) Amazon China says it sells about 10 million imported products on its cross-border e-commerce section Haiwaigou, which launched in November 2014. Amazon also has reported that Chinese consumers’ purchases on Amazon sites outside of China were six times higher in 2015 than a year earlier, though the company did not provide a dollar figure.
Speaking of Gurr’s departure, Piacentini said in his statement, “We have planned for this change for a while and Zhang Wenyi could help us make great strides in China as she knows the market and Amazon both very well.” Besides cross border e-commerce, Amazon’s businesses in China include Kindle, Amazon Logistics Services and Amazon Web Services, according to the company.
Amazon is No. 1 in the Internet Retailer 2016 Top 500 Guide, which ranks North American retailers by online sales, and No. 4 in the China 500, which ranks retailers operating in China by their sales in that country. Although Alibaba accounts for the majority of online retail sales in China, it is not ranked because it is not the merchant of record for any sales, instead, like eBay, it provides a platform on which other companies sell.
For a full report on the opportunities for foreign brands to sell online into China, read “Open Door Policy,” which appears in the November 2015 issue of Internet Retailer magazine.
For more Chinese e-commerce data, please click here for the new-released Internet Retailer 2016 China 500.