Internet & Tech

Coupling in commerce

Two US tech giants strike new deals in China, despite political tensions


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“The United States does need to get tough with China,” claimed Joe Biden in an article in Foreign Affairs earlier this year. All the same, the new president is expected to take a more diplomatic direction in Sino-US relations than the current occupant of the Oval Office (see WiC518). Corporate America also seems more intent on tightening ties with the Chinese in business terms rather than stirring new antagonism, as two recent tie-ups in the internet sector also suggest.

The first is between Amazon and Baidu. On November 18 the US e-commerce giant announced the launch of a mini programme on Baidu’s mobile app. Known as Haiwaigou – or ‘shopping overseas’ – the new platform will give Chinese consumers access to more than 30 million foreign-branded items, with a focus on baby merchandise, sporting equipment, home furnishings and consumer electronics.

Amazon is eyeing the mammoth purchasing power of China’s consumers after Alibaba and raked in another record of $116 billion in sales during this year’s Singles’ Day shopping festival (see WiC518).

After inking the deal with Baidu, Amazon then made a splash by promising even better discounts of its own this week on November 26, the day of Thanksgiving. To make things easier for its new shoppers from China, Amazon also partnered with ShenmeZhideMai, a price comparison website, and said that overseas deliveries will be handled by Chinese courier SF Express.

“Chinese online shoppers have become much more comfortable in buying imported goods, as seen from the varieties and volumes that they purchase,” Li Yanchuan, Amazon China’s vice president, told The government raised the annual tax-free purchase quota of international goods to Rmb26,000 ($3,947) a person in 2019, Li said, but a lot of shoppers still make purchases beyond that cap, with people aged 25-34 accounting for 49% of consumer demand for imported products.

A survey by consulting firm Oliver Wyman found that 48% of respondents had spent more on Singles’ Day this year than last year. Demand was also robust enough to support a 366% increase in orders on’s overseas merchandise platform, compared to an average day in October. “The pandemic, at least in our survey, is behind them,” Jacques Penhirin, partner at Oliver Wyman, told CNBC of Chinese shoppers, adding that a recovery at home and an inability to travel abroad due to Covid-19 has freed up spending on more expensive imports.

Daimler, for instance, raised its forecast for full-year earnings in 2020 after Mercedes-Benz recorded a 24% leap in demand in China during the third quarter.

Amazon shut down its domestic marketplace in China last July, retaining its cloud computing business and encouraging Chinese shoppers to buy imported goods from its international website (see WiC449). Its deal with Baidu shows its renewed interest in a China push.

Another new partnership has been struck between Google and NetEase’s online education arm Youdao. Google will now offer proprietary classes under the banner ‘Grow with Google’ on one of Youdao’s teaching platforms. The first courses on offer will focus on topics including augmented reality, digital marketing and the deployment of TensorFlow (Google’s open-source machine learning platform).

Google dropped its core search engine business in mainland China in 2010, although it maintains an indirect presence on the hundreds of millions of smartphones in China that continue to rely on its Android operating system. In 2017, there were rumours that the Google Play app store might be launched in China in partnership with NetEase, according to The Information, a tech news outlet. The following year there was also talk of a new search engine called Dragonfly that would work within limits acceptable to the Chinese government. But the project was scrapped soon afterwards, following widespread disapproval among Google’s employees.

It’s latest education offering looks far less controversial.

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