Bezos: Amazon.com Will Boost China Investment -- WSJ

Online retailer Amazon.com will boost investment in its China unit, according to an interview with CEO Jeff Bezos published in the Tuesday Wall Street Journal. China is the world's largest Internet market behind the U.S. Amazon purchased Chinese Internet company Joyo.com for $75 million in 2004, renaming it Joyo Amazon. Joyo is the company's fastest growing business, but its 12% Q1 share lags market leader Dangdang.com's 18%. "With something growing this fast and doing this well, as far as investment goes, we would like to double down," said Bezos. To lure customers, Amazon plans to offer free shipping on all orders and provide customer-specific purchase recommendations, a feature already available in other markets. Analysts speculate that Chinese e-commerce sales could more than triple to 18.83 billion yuan ($2.5 billion) in 2010 from 5 billion yuan in 2006. Amazon.com shares gained 2.7% to $70.42.

Sources: Wall Street Journal, Bloomberg, MarketWatch
Commentary: Amazon: A Case of Irrational Exuberance At Current Valuations • Amazon: Back in the Limelight and Ready to Roll • Why Amazon Will Never Really Be Profitable
Stocks/ETFs to watch: Amazon.com, Inc. (AMZN). Competitors: Barnes & Noble Inc. (BKS), eBay Inc. (EBAY). ETFs: Internet HOLDRs (HHH), First Trust Dow Jones Internet Index (FDN), Rydex S&P 500 Pure Growth (RPG)
Conference call transcripts: Q1 2007

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Comments

[Winston Kotzan:]

AMZN might run into the same problem as eBay. Chinese don't feel entirely safe doing business online yet, as the credit card and debit card system is undeveloped and identity theft is a rampant issue. The Chinese also like to see the item firsthand before paying, and don't trust what a company will send them in the mail.

2007 Jun 05 09:56 AM