Amazon may be closing its marketplace in China, but it's still aggressively pursuing growth in the country with a new lending service that could help bolster its sprawling seller community there.
Amazon's new loan service is the company's latest initiative in China, after announcing the closure of its marketplace there last month. Instead of targeting Chinese consumers, the lending program is aimed at growing the number of China-based merchants who sell directly to Amazon consumers in the U.S. and the rest of the world, as Chinese sellers now account for a significant share of Amazon's global marketplace sales.
The primary reason for their success is in pricing, as Chinese sellers are able to source products at a lower price than sellers in other parts of the world, said Juozas Kaziukenas, CEO of Marketplace Pulse. Although the general Chinese consumers may not find Amazon so appealing, China-based merchants are increasingly using it as an important sales channel to directly reach U.S. consumers, he said.
"We created Amazon Lending to make it simple for sellers to efficiently get a loan, because we know that capital can help put sellers on the path to success," Amazon said in an emailed statement. Azoya's Zhao said it makes sense for Amazon to launch with a local lending partner as it helps meet China's complicated government regulation and compliance measures. Other Chinese tech giants, like Alibaba and Tencent, have similar partnerships for their own online lending services, he said.