Wednesday, February 15, 2012

Amazon in China: A Clear but not Always Affordable Choice

In the previous post about my trip from Guangzhou to Zhuhai I mentioned that I needed to wait an additional 30 minutes to catch a train. The extra time was well spent, though, due to meeting this pair of young women in their mid-20's:

Outside Guangzhou's South Train Station

We met because they asked me to take a photograph of them together with one of their cameras. Afterwards, we chatted about a variety of topics.

During the conversation, the person on the right side of the photo mentioned Dangdang, a Chinese electronic commerce company. One of its competitors in China may be more familiar to those outside of China, It was relevant to some research I have done, so I asked her about her perceptions of the two services and how much, if at all, she used them.

She said that when she had been in college she always used Dangdang and almost never used Amazon's Chinese website. The reason was simple -- price. As a college student her funds were particularly tight and the lower prices she found on Dangdang were a very important factor in her choice of book sellers.

However, now that she has a job and is making money she is more likely to purchase her books from despite still finding their books to be more expensive. The reason she is willing to part with more of her hard-earned money is that in China it is possible to buy paperback books of varying quality. Now that she can afford it, she said she buys books from Amazon because she has found they sell better quality books which are easier to read than the books she has bought from Dangdang.

I have not personally compared books from Dangdang and Amazon, but based on the quality of other books I have seen being sold in China I could appreciate her comments. Especially for books that are not likely legal copies, such as those often sold at the mobile bookstores I mentioned last year, the paper and print quality can be very inferior (there can be varying degrees of quality). Sometimes, the blurriness of the print adds a noticeable strain to reading, pages stick together, or the print easily smudges.

Another reason she shops at Amazon now is that Amazon is cheaper than another alternative -- buying equal quality books at brick-and-mortar bookstores. While she is happy to be making money, she feels it is very little and is motivated to find ways to save on her book purchases as long as quality is not sacrificed.

A final and very key element to her choice of Amazon is "trust". She knows the books will arrive quickly and that they will be the best quality possible.

Of course this is just a single case and based on her self-reported behavior and perceptions. And I have come across some very different opinions of Amazon elsewhere in China (possibly a post for another day). Regardless, this captures some key themes I have repeatedly seen in China.

The evolution of this woman's shopping habits is of particular interest to me because being able to buy lower quality paperback books is not a typical option in countries such as the U.S. (used books are another story). The difference touches on an issue important for companies such as Amazon to consider: the value they can provide in China may be different from what they provide in other countries.

The issue of "trust" also caught my eye. For now, I will just say that it takes on a very special significance in a country where fake or poorly made products are easily found. While some companies are negatively hurt by fake/imitation products in China, it also presents a key opportunity that I think many are failing to fully seize (again, a post for another day).

Price, quality, and trust. Important factors all around the world, but they can play out in their own special ways in China. And for this particular woman's book needs right now, Amazon has hit a sweet spot.

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