Amazon Takes on Alibaba With Japan Portal for Chinese Shoppers
(MENAFN- ProactiveInvestors - UK) Fuller Treacy Money, 08:39
Amazon Takes on Alibaba With Japan Portal for Chinese Shoppers
'The opportunity is huge,' said Jasper Cheung, president of Amazon Japan. 'We have already increased the selection that we can export by the millions over the last several weeks.'
Chinese shoppers are looking for authentic Made-in-Japan products, spooked by tainted baby milk and fake merchandise proffered on web stores in China. While that's helping to drive an influx of shoppers to Japan -- 3.08 million Chinese tourists have visited the archipelago so far this year, up 41 percent -- it's also boosting demand for Amazon.co.jp, Wandou and other web outlets featuring Japanese goods.
Rakuten Inc., the Japanese online store, also lets people shop for stuff from Japan in Chinese, as well as in Korean and English. Amazon's Japan website has been available in English for years.
The new iteration of Amazon Japan's shopping portal, in simplified Chinese, offers millions of products with more coming, the company said. Consumers in Asia's biggest economy are demanding access to authentic brands and quality, from clothing and cosmetics to baby products and health goods. That's why Costco Wholesale Corp. has a shop on Alibaba's Tmall.com, while Macy's Inc. and other U.S. retailers are tapping into China's dominant online-payments system by accepting Alipay on their sites.
Eoin Treacy's view
For billions of new consumers entering the middle classes their first taste of consumerism is likely to be via their mobile phones where they are aggressively marketed to via Wechat, Facebook, Instagram and a host of other social media sites. That puts dominant online marketplaces like Amazon, Alibaba, Ebay and Rakuten in a favourable position to compete for their business and China represents a major battleground. Uber's experience in China highlights the difficulty of doing business in that country where one is competing with a domestic copycat operation. Amazon's strategy of building out its Japanese operation may act as a hedge to domestic Chinese operations where it competes directly with JD.com and Alibaba.
Saudi Arabia Cuts Oil Price to Asia as Iran Battle Heats Up
Iran has boosted crude production 25 percent this year and aims to reach an eight-year high for daily output of 4 million barrels by the end of the year. Customers in Asia account for the largest share of Iran's new sales, according to shipping data. The nation dropped to fourth-biggest OPEC producer after international sanctions that restricted its supplies in 2012. It has since returned to third place after the sanctions were eased in January. Saudi Arabia has responded by boosting its crude and refined products exports.
'The market share battle between them and Iran is back on in a big way,' John Kilduff, partner at Again Capital LLC in New York, said by phone on Sunday. 'This is a throwdown challenge that I'm sure the Iranians will match.'
Asian demand for crude is stalling as refineries from Singapore to China and South Korea are cutting operating rates amid a slump in margins and rising supply from state-owned giants, which can draw on large crude inventories that have built up over the past two years of low prices.
Eoin Treacy's view
With most Western headlines focusing on the ramifications of the refugee crisis on EU, it might be easy to forget that the war in Syria is a venue for Saudi Arabia and its allies to fight Iran and its allies. Napoleon said an army marches on its stomach, but funding is just as important as supply lines and the protagonists in this conflagration are heavily dependent on oil. By engaging in a price war Saudi Arabia is taking direct aim at Iran and other producers might be considered collateral, or perhaps convenient, damage.
South Korean Stocks Could Break Free From Bargain Hunters
Not everyone is optimistic of Korean companies' earnings prospects.
Kee Ho Sam, a Seoul-based fund manager at Dongbu Asset Management who helps oversee 13 trillion won, said it's still too early to trust earnings estimates, as analysts could downgrade them for year-end annual earnings. For the Kospi index rebound, sales growth is necessary, he said.
Last month, South Korea's central bank held its benchmark interest rate at a record low and lowered its estimate for gross domestic product expansion this year to 2.7 percent, from an April projection of 2.8 percent. The government announced a 10 trillion won ($8.7 billion) supplementary budget in June, mainly to create jobs and aid regional economies that will be hurt by corporate restructurings.
Shinyoung's Huh remains optimistic.
The 'extreme pessimism' that's plagued Korean equities for years was overdone, he said. 'It will easily break free from the trap when there is market consensus that it can.'
Eoin Treacy's view
There was widespread optimism that attractive relative and absolute valuations would spur outperformance by major Asian markets last year but the concurrent relative strength of the Dollar acted as a headwind which sapped demand from foreign investors. That might now be changing as expectations for Fed rate hikes have been scaled back.
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