Amazon just launched a lending service in China while shuttering its local marketplace – CNBC
What happened: Amazon has launched a new lending service called “Lending Referral Program” for merchants in China, according to a post on the company’s sellers forum. The service aims to help China-based sellers, who sell products to Amazon consumers across the world, expand their business on the site by connecting them with local lenders. Under the program, prequalified sellers can apply for short-term loans to help them purchase more inventory. The e-commerce firm has partnered with financial service provider Shanghai Fuyou Commercial Factoring and will seek more lending partners in the future.
Why it’s important: Amazon’s latest initiative comes a month after closing its China marketplace. The US e-commerce giant has struggled against competition from rival Alibaba and other domestic players. Failing to serve Chinese consumers, Amazon is now shifting focus to merchants—still an important front for the company considering that more than 40% of its merchants are in China and they account for a significant share of Amazon’s global marketplace sales. Amazon previously said that withdrawing from the domestic marketplace would allow it to focus more on its cross-border e-commerce business.