Prime Launched by Amazon in China Targeting Demand for Overseas Shopping

Putting the U.S. online retail firm Amazon, in closer competition with local rivals Alibaba Group and JD.com, the company has launched a tailored version of its Prime service in China to tap consumer demand for overseas goods.

From infant formula to luxury handbags, bought through online platforms like Alibaba’s Tmall International and via informal “daigou” shopping agents, Chinese shoppers have been driving a boom in “cross border” shopping with high demand for products.

Lagging far behind market leaders Alibaba and JD.com, Amazon, which dominates online shopping in the United States, is a bit-part player in China. A bridge to sellers in overseas markets is however offered by the U.S. firm does to local shoppers.

“The launch of Prime in China represents a new convenient way for Chinese customers to access authentic and quality products from all over the world,” Greg Greeley, Amazon Prime’s vice president, said in a statement emailed to Reuters on Friday.

Amazon in China even launched a store on rival Alibaba’s Tmall platform last year in an attempt to boost sales as it has been struggling to gain a serious foothold in China, where it held just 1.1 percent of market share in 2015 according to iResearch.

And to link Chinese shoppers with global sellers, Alibaba and JD.com have also been expanding their cross-border offerings.

A  year-long subscription, which would give the users access to unlimited free international shipping on orders over 200 yuan ($29.50), would be priced at 388 yuan ($57.23) for Chinese shoppers under the Prime service of Amazon.

Amazon declined to comment on if it would launch other Prime services it offers in the United States in China, including what could be contentious online music and video services.

With respect to foreign media products, there are stringent rules in China. While this month Netflix abandoned plans to enter the market all together, Apple Inc scrubbed their iBooks and Movies services from the market earlier this year.

Meanwhile in the U.S., the state attorney general’s office said that after making deductions for lunch breaks that the workers never took, an Amazon.com Inc delivery contractor in New York City has agreed to pay $100,000 in back wages to drivers.

From Amazon Fresh to resident and commercial locations in the city, the company, Cornucopia Logistics, delivers Amazon.com packages and food.

The settlement will allow short-changed workers, who would often miss meals because of heavy delivery schedules, to receive the restitution, Attorney General Eric Schneiderman said in a statement.

The settlement would impact current and former drivers, driver’s helpers and messengers to the tune of more than a 100.

“Delivery workers travel all hours of the day and night and through all kinds of weather to meet tight time frames. They deserve to have a proper lunch break, and when they don’t, they certainly must be properly compensated for all of their work,” Schneiderman said.

Employers are required to pay workers for all hours worked and provide periods for meal breaks, typically a half hour according to New York state labor laws.

The statement said that in addition to providing the attorney general’s office with quarterly reports and payroll documents, Cornucopia must designate an internal officer to ensure labor law compliance under terms of the settlement.

(Adapted from Reuters)

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