Amazon launched Lending Referral Program in China
The new lending service is important for Amazon, as an increasing number of its most successful sellers are based in China, and providing easier access to capital could further boost their growth.
According to a recent report by Marketplace Pulse, an e-commerce research and consulting firm, over 40% of the best-selling merchants on Amazon are now in China, a figure that’s more than doubled since 2016.
The primary reason for their success is in pricing, as Chinese sellers are able to source products at a lower price than sellers in other parts of the world, said Juozas Kaziukenas, CEO of Marketplace Pulse. Although the general Chinese consumers may not find Amazon so appealing, China-based merchants are increasingly using it as an important sales channel to directly reach U.S. consumers, he said.
“Chinese sellers have something to offer to shoppers on Amazon, but Amazon itself failed to offer anything to Chinese shoppers that wasn’t already perfected by local players like Alibaba,” Kaziukenas said.
An Amazon spokesperson said the company doesn’t disclose third-party seller sales per country and that sellers from China are not its biggest group of sellers. But it acknowledged the launch of a new lending service in China, adding that Amazon Lending also provides access to loans to sellers in the U.S., U.K., and India.
“We created Amazon Lending to make it simple for sellers to efficiently get a loan, because we know that capital can help put sellers on the path to success,” Amazon said in an emailed statement.
Amazon said in the forum post that the service is currently invite-only for select sellers who “meet the criteria determined by both Amazon and the lenders.” The qualification criteria varies by lender, the company said, but sellers have to agree to share certain personal data, including sales rates and growth, return rate, negative feedback rate and average inventory value before receiving the loan. The final decision on loan underwriting and fund disbursements is made by the lender, the post said.