Amazon is making further inroads on Alibaba’s turf. The e-tailer has launched its Prime membership in China and competition among the e-commerce players may ramp up as a result.
So far, Amazon hasn’t been able to infringe much in China, where Alibaba largely dominates all things e-commerce. In 2015, Amazon had just more than 1 percent of market share in the country, according to iResearch. But Prime may just be the thing that shifts that.
With the new, tailored Prime service, Chinese consumers would pay 388 yuan ($57.22) for a one-year membership—much less than the $99 U.S. consumers pay—but would only have access to unlimited free international shipping on orders above 200 yuan ($29.50). By contrast, the $99 U.S. consumers spend gets them unlimited free two-day shipping and free same day shipping on qualifying orders (typically valued at $5.99 or more), among other perks.
“The launch of Prime in China represents a new convenient way for Chinese customers to access authentic and quality products from all over the world,” Amazon Prime vice president Greg Greeley told Reuters in an email.
Cross-border shopping has been big among Chinese consumers as demand for big international brands and luxury products picks up.
Prime in China could put Amazon in closer competition with both Alibaba and its local competitor JD.com. The obstacle Amazon will have to work around is the fact that in China, free shipping is already the norm with Alibaba and JD.com platforms, so getting shoppers to now pay for the service could prove more challenging than in the Western world where consumers are more attuned to Prime as a perk.
Amazon has not yet said whether it will extend some of the other Prime benefits its U.S. customers enjoy to the shoppers in China.