Amazon.com Inc, the world's largest online retailer, is prepared to run losses in China to secure a position among the top three players by sales in the country's cut-throat but booming e-commerce market, its China chief said on May 10.
China's $36 billion e-commerce industry is hyper-competitive with online retailers and marketplaces such as Dangdang Inc, 360buy and Alibaba Group's Taobao Mall frequently launching price wars and marketing campaigns to win market share.
The latest salvo was fired by Taobao Mall earlier this week when it said it will spend 200 million yuan ($31.7 million) to subsidise a four-month home appliances and electronics promotion, to compete with 360buy.
"We are not so concerned about when we make money or how much money we make," Amazon's Wang Hanhua told Reuters in an interview. "We tend to take a very long-term view of things. We believe that China's e-commerce eventually will be huge. It's not going to be a winner-takes-all market...We will definitely aim for the top three in China," he said.
Figuring out where Amazon ranks now is tricky. The company reported $5.76 billion in first-quarter sales from international sites including China, but it does not break down results by country. Wang declined to provide figures for China.
Industry data that measures market share in China is calculated according to transaction volume, not sales. Based on those figures, Amazon trails far behind 360buy, which controls half the business-to-consumer online market to Amazon's 7 percent.
Although Amazon's China business is still relatively small, sales are growing at a triple-digit rate, making it the company's fastest-growing national market, Wang said. Amazon declined to say how many people it employs in China.
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