Amazon-UK deal boosts China trade

China is identified as a priority market in an agreement recently signed by UK Trade and Investment and Amazon, the US e-commerce company, aimed at helping the United Kingdom's small and medium-sized enterprises increase their exports and grow online sales.

UKTI will work closely with Amazon to introduce British brands to worldwide markets through Amazon and provide necessary support and education to grow their business on Amazon.

The e-commerce company, based in Seattle, Washington, will provide dedicated resources to help UK companies to engage with them on a global basis, and will also create a full set of services to support UK companies selling in other countries, including China.

Michael Charlton, deputy director-general of UKTI China, says: "This partnership with Amazon provides UK companies with a major opportunity to explore international markets in the digital economy and increase exports. China, as the world's largest and most dynamic e-commerce market, has seen a boom in cross-border trade in recent years, given Chinese customers' surging demands for international brands.

"We are happy to see that UK companies can further tap into the China market with Amazon China, which represents a trusted image among Chinese customers."

Doug Gurr, president of Amazon China, hailed the partnership with UKTI, and says it "will further sharpen our edge as a trusted go-to place for any local customer looking for high-quality and authentic international selection across the globe, including the UK, and as a reliable and convenient on-line channel for any UK brand that would like to export to the China market".

Amazon China, formed in 2004, operates three major businesses in the country, including online shopping (Z.cn), Kindle and digital content, and Amazon Web Services.

Given the size of Chinese companies such as Alibaba, JD.com and others, the competition in the Chinese e-commerce market is high, but Amazon China has a reasonable share of the market.

"What we tend to focus on is something needed that currently has not been met even by the fantastic job that TMall, Taobao and JD do," says Gurr. "That's why if you look at our approach to China, it has almost entirely focused on cross-border e-commerce business."

"We strongly believe in competition because ultimately competition improves services for customers. One of the reasons we love being in China is that China has some fantastic businesses such as Alibaba, JD, Baidu. We think that is great because that helps to force every organization to do a much better job for their customers," he adds.

Cross-border e-commerce means helping China's businesses sell all around the world, but it also means aiding Chinese customers to get access to global brands and products that are otherwise very hard or very expensive to get, he says.

"We believe that is right for Amazon China because that builds on two things. It builds on the fact that we have existing relationships with hundreds of thousands of brands all over the world, and we have these global logistic capabilities."

He says there is recognition among governments worldwide that cross-border trade is beneficial to all parties.

Historically, there have been barriers to cross-border trade. There are complex duty, taxation and translation arrangements, as well as issues with intellectual property rights, he says.

Gurr says some of these elements slow cross-border trade. However, he says that more discussions between countries about cross-border trade are a positive sign. Governments around the world are trying to put in place structures, mechanisms and laws to facilitate cross-border trade, he says.

"We think that would be good for economies and we see that in a very real sense in China the economy is transitioning from 'made in China' to brands from China - that's what we are seeking to support," Gurr says.

Fighting the proliferation of knock-off products has always been a long battle for e-commerce companies, and Gurr says clamping down on counterfeits is one of his top priorities. "We will not be able to retain customers' trust unless they can buy with absolute confidence from Amazon. When you buy from Amazon, what you are buying is the genuine and authentic product, sourced directly from the brand."

His message to the customer is: "When you buy from us, what we are doing is connecting you, not through perhaps three or four layers of middle people, but directly to the brand."

Another key issue for customers engaging in cross-border transactions is the speed of delivery. In a bid to achieve fast delivery, Amazon China launched the free trade zone model in August, a service that brings in the most popular imported products among Chinese customers and fulfils customers' orders from a free trade zone directly.

Customers get a localized shipping lead time of one to three days on average, according to Amazon China.

Gurr was vice-president of Amazon UK before becoming Amazon China president. He says that to be successful in a global business, you need to work with global organizations but to be sensitive to what you need to do locally.

He says what he can primarily contribute is to help bring leverage to global relationships, adding: "Having done that from the UK, working with colleagues in Seattle and elsewhere, in a sense it is doing just the same thing from Beijing."

wangmingjie@mail.chinadailyuk.com