E-commerce giant Amazon has launched its Prime subscription service in China – but shorn of its online music and video operations.
Instead Amazon Prime China will offer unlimited free shipping within China on millions of items and also on some categories of goods shipped from overseas. The cost is $28 (RMB188) during the promotional period that runs till February, and will rise to $57 (RMB388) thereafter.
The company did not explain the video and music omissions, though the answer is likely to be regulatory. China does not allow foreign media to operate freely in the country and video rival Netflix recently admitted that it saw no prospect of being allowed to enter China in the near future.
"We cannot run our normal playbook in China,” Amazon founder Jeff Bezos said in a news conference last week.
Chinese authorities have this year been pushing back against foreign media. DisneyLife, a content joint venture between Alibaba and Disney was taken off air in April only four months after it launched inline. Similarly, Apple’s iTunes Music and iBooks were also halted.
While the closure of DisneyLife can have done little harm to Alibaba – it has numerous other entertainment options including streaming video platform Youku Tudou – the launch of Prime is a move by Amazon that strikes at Alibaba’s Chinese home and its core business.
Amazon’s strategy currently appears to be about offering a wider choice of foreign goods to Chinese consumers than are currently available via Alibaba, JD.com or other smaller e-commerce operators.
Online shopping has proved hugely popular in China with some RMB16 trillion transacted last year – an increase of 21% — and 23% shoppers buy goods from abroad. Alibaba has teamed up with numerous foreign brands and retailers such as Barney of New York.