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TRADE WARS
Amazon sets up shop in China on Alibaba platform
by Staff Writers
Shanghai (AFP) March 6, 2015


China giant Fosun takes 5% stake in Thomas Cook
Hong Kong (AFP) March 6, 2015 - Chinese conglomerate Fosun International announced Friday it had bought a five percent stake in UK-based tour operator Thomas Cook in its latest foray into the travel market.

The move comes less than a month after it snapped up 92.8 percent of French holiday resorts group Club Med.

A statement to the Hong Kong stock exchange, where Fosun is listed, said the company had bought the stake, worth 91.8 million pounds ($140 million), at 125.59 pence per share.

"The Group intends to purchase further Thomas Cook shares on the open market at the appropriate time," the statement said, adding that the company was seeking to take its stake to around 10 percent.

Thomas Cook shares rose sharply on the London Stock Exchange Friday, up 14.5 percent to 138 pence after 10 minutes of trading.

Fosun shares closed slightly up at HK$12.78 ($1.65), a rise of 0.18 percent.

Privately-owned Fosun, which is based in Shanghai and controlled by Chinese billionaire Guo Guangchang, is a diversified conglomerate with interests ranging from media to pharmaceuticals and mining.

The statement from the company said that the move would "capitalise on the increasing demand for international leisure travel".

"The investment in Thomas Cook complements other recent investments of the Group in the sector, providing opportunities for further value creation," it said.

Thomas Cook said the partnership with Fosun would see further development of some hotels and broaden access to the Chinese tourism market in the medium term, according to Bloomberg News.

US online retail giant Amazon has set up shop on the business-to-consumer platform of Alibaba as it seeks a greater presence in the massive Chinese market.

The Seattle-based firm is offering food, women's footwear, toys and kitchenware through its store on Tmall.com which was "quietly" launched on Thursday, Chinese media reported. Amazon's storefront carries the message: "It's Day 1."

Amazon and Alibaba are considered competitors in some areas but unlike the US firm the Chinese company has no product stocks of its own, simply providing a trading platform.

"We welcome Amazon to the Alibaba ecosystem and their presence will further broaden the selection of products and elevate the shopping experience for Chinese consumers on Tmall," an Alibaba spokeswoman said in a statement provided to AFP Friday.

Tmall is estimated to hold more than half the market in China for business-to-consumer transactions.

Amazon is not new to China. It opened an official store on Tmall for its Kindle e-book reader last year.

The firm made its first foray into China in August 2004 through the acquisition of Joyo.com, an online retailer of books, music and videos. The website was re-branded as Amazon.cn in 2011.

"China's e-commerce industry is fast-growing and nobody wants to miss it," Yang Xiao of e-commerce services provider HC International told AFP. "Amazon wants to add an additional distribution channel in China."

He said the move could be aimed more at China's JD.com, which has a similar business model to Amazon and also competes with Alibaba.

"It's simple game logic -- an enemy's enemy is a friend," Yang said. "Amazon is more likely targeting JD.com and it's a win-win situation for Tmall."

Amazon is initially selling nearly 500 items, with more expected to be made available later.

As of Friday morning, the top sellers on the Amazon store included a 220-yuan ($36) German drinks container, and canned almonds imported from the US with a price tag of 44 yuan ($7).


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