Amazon.com Inc., the world's biggest online retailer, will increase investment in China, the company's fastest-growing market as well as the largest Internet market after the United States.
On his first official visit to China since Amazon.com bought the Chinese Internet company Joyo.com three years ago, Chief Executive Officer Jeff Bezos unveiled on June 5 a new brand strategy for the Chinese site, as well as several other features designed to attract more Chinese customers. He said Amazon.com intends to pour more capital into expanding its China operations, though he didn't provide exact figures.
"We at Amazon.com are contributing our extensive technology and expertise to make Joyo the very best in the world at serving customers," said Bezos. "We are very proud to be associated with them."
Joyo has been growing fast since Amazon.com bought the Chinese company for $75 million in 2004, with the products it sells increasing 32 times since then.
Originally launched as an online bookstore in 2000, Joyo offers customers products in 20 categories. In addition, Joyo.com.com now provides COD (Cash on Delivery) delivery to more than 330 cities in China and same-day delivery to customers in Beijing, Shanghai and Guangzhou.
"It has been very gratifying to have such a strong partnership with Amazon.com," said Joyo.com's President Wang Hanhua. "By applying Amazon.com's technology and experience to the Chinese market, we've been able to make significant improvements across all areas of our website-from fulfillment to selection to pricing and customer service. We never forget that everything we do starts with the customer, and we look forward to serving our customers even better in the future."
Born at the right time
Amazon.com announced that Joyo will now be known in China as "Joyo Amazon" instead of "Joyo.com."
"We hope that customers in China will see our endeavor to improve their shopping experience upon seeing the brand of Amazon," Bezos explained of the timing. "We have won honor and credit by maintaining high-quality services in the past 12 years and we would like to share all these with Joyo.com."
Executives also trumpeted an extension of free shipping for all Joyo orders, a benefit previously available only for purchases of more than 99 yuan, or just less than $13. They also unveiled a feature called "My Joyo.com," that will provide individual recommendations, based on customers' purchasing and browsing history, much as Amazon.com's other global sites do. It helps customers find and discover products-from each of Joyo.com's 20 categories-that they never even knew they wanted.
Wang explained they chose to change Joyo to Joyo Amazon now to offer customers both the assurance of the prominent brand and shopping experiences guaranteed by Amazon.com's technologies and high-quality services, such as customized recommendations.
Furthermore, Joyo opened its latest fulfillment center in Guangzhou just in May, which will primarily serve customers in southern China. Joyo also operates fulfillment centers in Beijing and Suzhou, for a total of more than 35,000 square meters of space. The expanded fulfillment network also ensures customers receive their products faster.
Localization is key
Bezos' Beijing visit came amid increasing competition in the Chinese Internet sector, which already boasts the second biggest user population in the world, with more than 137 million, after the United States. Big foreign Internet companies such as Google Inc. and eBay Inc. have been struggling to keep pace with smaller local rivals that have been more nimble in addressing the peculiarities of the Chinese market.
Bezos acknowledged the problems foreign Internet companies might meet in China and said Amazon.com is determined to avoid them.
"When they come to China and hire a management team in China, the Chinese managers see it as their job to make their American bosses happy, instead of trying to keep their Chinese customers happy," said Bezos.
"We are not going to make that same mistake," he said.
Amazon.com will use its additional investment in Joyo to expand the online retailer's product inventory and warehouses, and to hire more bicycle-riding delivery people. Joyo uses the bicyclists to skirt automobile traffic on the crowded streets of Beijing and other major Chinese cities.
In the first quarter this year, Joyo ranked second in the local online retail market with a 12-percent share, behind Dangdang.com, with 18 percent, according to Beijing-based researcher Analysys International. Sales in China's electronic commerce market may more than triple to 18.83 billion yuan ($2.5 billion) in 2010, from 5 billion yuan in 2006, the research firm said.
Joyo's sales have grown by "triple-digit percentages" annually in recent years, according to Wang.
"It's an achievable goal that China will become our fourth largest market in the world," said Wang. "It's a long-term investment and we have the resources and patience."
Still, Bezos said Joyo remains in an "investment phase." He likened the market to the U.S. Internet market when he founded Amazon.com 12 years ago and said experience shows it can take five to seven years to become profitable in a new market. | 
