Amazon China (Chinese: 亚马逊中国), formerly known as Joyo.com (Chinese: 卓越网), is an online shopping website. Joyo.com was founded in early 2000 by the Chinese entrepreneur Lei Jun in Beijing, China. The company primarily sold books and other media goods, shipping to customers nationwide. Joyo.com was renamed to “Amazon China” when sold to Amazon Inc in 2004 for US$75 Million. Amazon China closed its domestic business in China in June 2019, offering only products from sellers located overseas.
History
Original
Joyo.com was founded by Lei Jun, Chinese entrepreneur and owner of Kingsoft, in May 2000. Kingsoft decided to make Joyo.com into an online bookstore in 1999. Joyo.com was originally a site offering programs for downloading onto desktop computers. It later became an online bookstore and was the second online retailer of books in China after DangDang. They continued to expand their inventory and was in 2003 considered to be one of the largest online retailers of media goods worldwide. Lenovo Group Ltd and Kingsoft Corp were shareholders of Joyo.com until Tiger Technology Management LLC entered the corporation by investing $52 million for about 20% of Joyo, making it the third largest stakeholder. Joyo.com primarily merchandised goods such as books, music and videos to consumer nationwide. In 2004 Joyo.com was acquired by the American multinational technology company Amazon.com Inc. The company was rebranded and renamed in October 2011 to Amazon China. Amazon made many changes to Joyo, like redesigning the website by adding categories and self-service features, as well as implementing new payment methods. Amazon also changed the webpage URL to http://z.cn, but continued to be hosted at www.amazon.cn. Amazon China sold foreign fashion brands, home interior, toys, personal care and technology to their Chinese customers. Amazon was planning on establishing operations in Shanghai's free trade zone.
Acquisition
Amazon.com Inc. acquired Joyo.com in August 2004 and was bought for approximately US $75 million, where about $72 million was paid in cash and $3 million in stock options. The acquisition deal also included control over other Chinese subsidiaries and partners owned by Joyo.com. Amazon.com Inc. was already present and operating in the US, Canada, France, Germany, Japan and the UK before they entered the Chinese market. At the time, Joyos headquarters were located in the British Virgin Islands. Amazon.com Inc.’s CEO, Jeff Bezos, expressed excitement over the acquisition, but recognized the challenges of entering the Chinese market. Though being fully owned by Amazon, Joyo.com kept its name and branding until 2007, the name Joyo Amazon replaced Joyo and the website Amazon.cn was launched. Joyo continued to operate partly independently from other sites owned by Amazon for a couple of years. It expanded the variety of products being sold, including technology, cosmetics and baby products.
Sales revenues
Joyo.com was one of the largest online retailers before Amazon acquired the company and grew rapidly after it was launched. The sales revenues reached 56 million yuan in 2001 and 150 million yuan in 2003. According to the at the time president of Joyo.com, Lin Shuixin, Joyo generated in the second quarter of 2003 a 70% growth in revenues.
After the acquisition, Amazon China struggled to continue the growth and compete with local competitors. Due to changes in operation, salaries, customer service and technology by instructions from Amazon, Joyo lost US$13 after the acquisition according to ChinaByte. The New York Times wrote that Amazon China sold less in China than in Japan which was Amazons smallest market at the time. They were only responsible for about 6% of Amazons business in total and therefore not large enough to be included in Amazons annual reports. In 2013, Amazon China reported fiscal sales of US$74,4 billion, while their competitor, Alibaba had sales for approximately US$420 billion in 2014.
E-commerce in China
E-commerce is very popular in China and is the home of the world's largest market for e-commerce, responsible for approximately 50% of online purchases. China is the world's largest digital community with approximately 830 million internet users per 2018. China is among the world's largest exporters of commercial goods, and sold about five times as much as Japan in 2016. The US is especially important for Chinese manufacturers as the number of China-based sellers is growing on Amazon. Today, Alibaba-owned companies TaoBao and Tmall together make up approximately 55% of the Chinese e-commerce market and JD.com about 25%.