After recently slashing the cost of Prime membership and going live with full Amazon fervor in Mexico, the ecommerce God has now set sights on the mac daddy of market potential. In a move that could potentially make a huge impact on global ecommerce, Amazon is opening up a cross border platform and including air cargo shipping out of China, to outside markets. Because frankly, they just weren’t big enough.
With the local Chinese market currently monopolized for the most part by Alibaba’s Tmall, boasting 70% marketshare (who serves the market with ‘preferred’ pricing and attractive shipping options), it may have little effect for China’s ecommerce directly, however, could potentially send a tidal wave to ecommerce markets outside of China. This may be especially true if the ecommerce giant Amazon fails to assist in regulating brand trademarks and policies with its independent merchants peddling brand products. The platform could potentially allow anyone in China to be a cross border seller globally.
From L2, Inc.:
“Just 14% of e-commerce enabled brands in L2’s recent report on Cross-Border E-Commerce offer international shipping, and among those offering shipping, only one in four deliver products to consumers for free. This gives Amazon, armed with Prime, the high ground in the battle between retailers to win over the out-of-market consumer.”
Peddlers on the Streets of China Go Digital
This may quickly accelerate how brands tighten up their wholesale.com partners in China – as well as become legal bulldogs to go after unauthorized resellers. Those knock-off Adi Stan Smith’s may just be seen on the feet of teens and tweens in a suburb near you very soon, and for a fraction of the price. (not to mention that on fleek Hermes bag you were considering tapping the 401k for)
China, Drop Shipper for the World’s Consumers
Counterfeiting threat aside, brand retail may discover that it is soon competing with itself. With the China region able to deliver globally, even US and EU based businesses may find that their Shanghai office is scoring next year’s highest bonus with the added revenue hitting the P&L. How much cannibalization is to occur, remains to be seen, however, China, with Amazon’s tools and capabilities and more importantly, full service fulfillment option, could essentially drop ship to the globe.