Amazon Buys China's Largest Book Retailer
Amazon.com, the largest online book retailer in the world,
has purchased Joyo.com, China's largest book retailer
for US$75 million. This positions Amazon with an outlet
as China opens its domestic market to non-Chinese booksellers
by the end of this year.
Up until now, the domestic book market has been tightly
regulated, especially in the area of content. Foreign
companies will still not be allowed to publish in China.
While Beijing will continue to have a tight hold on content,
Amazon's purchase of Joyo.com suggests the rules for retail
ownership have changed. Joyo.com operates three fulfillment
centers in Beijing, Shanghai and Guangzhou that feed 30
delivery centers. The transaction is expected to close
in the third quarter 2004.
``I am confident that Amazon.com's expertise in global
e- commerce, in combination with Joyo's entrepreneurial
management team and employees, will bring the development
of e-commerce and online customer experience in China
to a new level," said Lei Jun, founder and chairman
of Joyo.com and president of Kingsoft Holdings Limited,
the largest shareholder of Joyo.com.
WTO (World Trade Organization) regulations require China
to open its domestic market to foreign retail books, periodicals
and newspapers by the end of this year. Foreign companies
will be allowed to establish joint ventures and partnerships
to retail and wholesale books, newspapers and periodicals
in the country.
Until the Amazon deal, non-Chinese companies have not
been allowed to take a majority share in Chinese companies.
Bertelsmann, the large German publisher and distributor,
has taken a minority position in a book chain in China.
With the Amazon deal, Bertelsmann will undoubtedly look
to expand its presence in China.
Amazon has said that its sales of books and other items
have grown faster internationally than in the US market.
Currently, the company has websites for the U.S., Canada,
France, Germany, U.K and Japan.
The Amazon purchase of Joyo.com came through after it
failed to purchase Dangdang.com, another large bookseller
in China. The management of Dangdang.com did not want
to give up control of the company to Amazon.
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