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Amazon seeks Alibaba's help to make it in China

March 6, 2015Written by George Anderson

Amazon has opened a store on Alibaba's Tmall online marketplace to help gain traction in China, where it has struggled since launching Amazon.cn in 2011.

"We welcome Amazon to the Alibaba ecosystem, and their presence will further broaden the selection of international products and elevate the shopping experience for Chinese consumers on Tmall," Candice Huang, a spokesperson for Alibaba, told Bloomberg News.

According to reports, Amazon is selling a variety of imported products, including food, kitchenware, shoes and toys, in its Tmall store. Amazon's Chinese division did not publicize the store opening and its representatives in the Asian nation failed to respond to media requests for comment.

An article on the Fortune website, citing Aram Rubinson of Wolfe Research as its source, reported Amazon is losing about $600 million a year in China. Mr. Rubinson called for Amazon to pull out of China.

"Everyone knows that Chinese e-commerce is dominated by Alibaba and at some point you go fish where the fish are," Sucharita Mulpuru, a Forrester Ressearch analyst told Bloomberg.

Separately, Alibaba has announced plans to compete with Amazon, IBM, Microsoft and others in the cloud computing space in the U.S. Yesterday, Alibaba announced its Aliyun division has opened a data center in Silicon Valley. Aliyun is the largest cloud services provider in China with 1.4 million customers.

"For the time being, we are just testing the water," Sicheng Yu, vice president and head of international business for Aliyun, wrote in a blog post. "We know well what Chinese clients need, and now it's time for us to learn what U.S. clients need."

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