Amazon launches new shipping program in China

Amazon boxes are seen stacked for delivery in the Manhattan borough of New York, January 29, 2016. [Photo/Agencies]

Amazon.com Inc announced on Friday the launch of its membership program in China in an attempt to use a tailor-made free cross-border shipping service to compete with local e-commerce rivals, such as Alibaba Group Holding Ltd.

The membership program named Amazon Prime China makes Chinese subscribers the first in the world who can enjoy free cross-border shipping directly from the United States. 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.

"Launching a unique program designed for our Chinese customers shows our obsession with Chinese customer needs, and demonstrates our long-term commitment to growing our business in China," said Russ Grandinetti, senior vice president of Amazon at the launching event in Beijing.

Created in 2005, Amazon Prime has attracted more than 65 million members in the US and acted as an effective catalyst to increase customer royal and boost sales. Industry observers say Amazon Prime China is expected to work the same magic in China especially among the country’s high-end shoppers, who are increasingly seeking for overseas goods to meet their sophisticated taste.

Western retailers, including Amazon China, have been facing fierce competition to gain a solid foothold in China’s crowded e-commerce market as local players such as Alibaba account for more than 90 percent of the share. Since the year 2014, Amazon has shifted its strategy to bring overseas products to China by leveraging its unique advantage of being a multinational e-commerce company with the most selection of overseas brands.

Lu Zhenwang, an internet expert and chief executive of Wanqing Consultancy in Shanghai, said that the newly launch 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.