Amazon plans to gain Chinese customers with free cross-border shipping

Chinese don't really celebrate Thanksgiving Day, but Amazon.com Inc plans to make Black Friday, which kicks off the day after this Western holiday, a big thing in China by offering Chinese online shoppers free cross-border shipping.

In late October, Amazon launched its membership program in China in an attempt to use a tailor-made free cross-border shipping service to lure the rising number of Chinese who seek for high-quality products overseas.

The membership program, Amazon Prime China, makes Chinese subscribers the first in the world to enjoy free cross-border shipping directly from the United States and the United Kingdom. With an annual subscription fee of 388 yuan ($57.23), the prime package offers unlimited free cross-border shipping on more than four million authentic overseas products and unlimited free shipping with no minimum purchase on more than nine million domestic products.

Elaine Chang, vice president of Amazon China, said in an early interview that the Nov 11 shopping festival in China and the Black Friday put together mark the annual shopping peak for many customers in China.

"We have launched Amazon Prime in China in late October because we want our users to be able to enjoy free, fast delivery and have a better shopping experience when the big shopping season comes," she said.

According to Amazon China, pricy cross-border shipping has stopped many online shoppers from purchasing overseas. With the Amazon Prime service, more consumption power is expected to be seen during Black Friday, which has been the top sales event in the US and UK, attracting a large number of bargain hunters.

Created in 2005, Amazon Prime has attracted more than 65 million members in the US and acts as an effective catalyst to increase customer royal and boost sales.

Lu Zhenwang, an internet expert and chief executive of Wanqing Consultancy in Shanghai, said that the newly launched Amazon Prime China is expected to help the company boost sales among its existing customers in the country.

"As soon as you join the membership, you will want to buy more because of the free shipping policy. And it is also likely to help the company gain new customers," he said.

However, whether or not Amazon can reshape the market landscape with its Prime service still remains to be seen, analysts said.

Chen Tao, an analyst with the Beijing-based internet consultancy Analysys, said that Black Friday has been gaining growing popularity in China but cross-border shopping accounts for less than 10 percent of China's e-commerce transaction volume. "Compared with other cross-border e-commerce companies, Amazon enjoys many perks, including a much wider selection of overseas products, to attract customers in China," he said.

"But it would be difficult for it to significantly boost its market share in e-commerce in China with merely a new shipping service. Plus many of its competitors also provide free shipping or low-price shipping. Whether or not Chinese users can accept the model of paying an annual subscription fee and enjoying unlimited free shipping during a year remains to be seen," he said.