E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
It happens just weeks after Amazon omitted that country from its expansion list.
On April 17, Amazon.com Inc. announced it would expand its Android Appstore to nearly 200 countries, but China was not on its list. Amazon had a surprise for the Chinese this past weekend: It opened up a Chinese version of the Appstore May 4. This sets the stage for a possible rollout of Kindle e-readers and Kindle Fire tablets in China, though Amazon has not made any announcements about the hardware yet. Amazon will only say it “does not speculate on future plans.”
This move comes on the heels of Amazon launching iPhone and Android versions of the Kindle e-reading app for China in December.
China is the second-largest market for devices for reading digital books, behind only the U.S., Renub Research finds. Worldwide e-reader sales will top 6 billion by the end of 2014, Renub Research says. China’s e-reader sales are increasing steadily and are expected to equal U.S. sales by 2014, Renub says.
Also last weekend, Amazon.com, No. 4 in the Internet Retailer Asia 500, launched a Chinese-language version of its app developer site.
Amazon.com declined to reveal precisely how many apps are in the Chinese version of the Appstore. “Amazon Appstore China has a good number of apps for the time being and the number is growing on a daily basis,” a spokeswoman says. “Local developers are encouraged to submit their apps to Amazon’s development portal.”
Amazon is not the dominant force in online retail in China that it is in the U.S. The Internet Retailer Top 500 Asia estimates Amazon’s e-commerce sales in China at $8.8 billion in 2012, just under 5% of total e-retail sales of $179 billion.
But the Appstore is a great way to drive brand recognition and consumer engagement, says Kelland Willis, an associate analyst at Forrester Research Inc. who covers global online and mobile strategies and consumer behavior in North America and Asia Pacific, with a specific focus on China. Willis says the Chinese Appstore could be a prelude to Amazon selling Kindles in China, but that Amazon faces stiff competition from Chinese e-reader players already on the market.
“The Appstore could be a way to test consumer response to paid applications before Amazon decides to invest in selling the hardware that goes along with them,” Willis says. “I don’t think Amazon gaining e-reader market share is something that would happen fast with the large number of affordable domestic hardware providers. Amazon will have to position the Kindle as something that provides value that is more significant than price. One opportunity is to offer consumers access to titles on the Kindle that may not have been previously accessible to the Chinese market, thanks to Amazon’s relationship with publishers in the U.S. and Europe.”