Amazon Launches Lending Referral Program In China
Tech giant Amazon recently announced that it is launching its new lending service in China. Called only as of the Amazon Lending Referral Program, the service aims to connect sellers with local lenders in China. The service offers a number of short-term loans to qualified applicants for them to be able to expand their business.
The launch of the Amazon Lending Referral Program in China came at a time when the tech giant is slowly pulling out of the country's retail industry. Nevertheless, Amazon has seen an opportunity in the country's growing lending service and believe that it could make significant progress in this niche market.
The Lending Referral Program is only open to merchants and sellers who are doing business on Amazon's platform. According to analysts, Amazon is the one responsible for vetting and picking prequalified sellers and connect them to local lenders.
A post on Amazon's seller's forum reads, "The Lending Referral Program is a new program by Amazon Lending. Under this program, you may be extended offers to apply for loans provided by local Chinese lenders to grow your business with Amazon."
This new loan service is just the latest of Amazon's ventures into China's massive market. This new venture was announced just a month after the company announced that it is closing its marketplace in China.
The new Amazon Lending Referral Program will not cater to Chinese regular Chinese consumers. Instead, the program will target China's growing number of merchants who are using Amazon's platform to sell their products and services directly to Amazon's consumers in the United States and the rest of the world. It is also important to note that Chinese merchants are now holding a significant portion of Amazon's overall global marketplace sales.
Many analysts said that by providing a lending service, Amazon can essentially help Chinese merchants that are using its platform to grow. By providing is merchants with easy access to capital, it could benefit and boost growth.
A recent report published by Marketplace Pulse reveals that more than 40 percent of the best-selling merchants on Amazon's platform is from China. This figure is more than double what it was in 2016. According to Marketplace Pulse CEO Juozas Kaziukenas, the reason behind this surge is pricing. Chinese sellers can offer their products at a reasonable lower price compared to their rivals from other parts of the world. Another interesting thing to note is that while Chinese products are reasonably cheaper, they can also compete in terms of quality which makes them all the more attractive compared to the competition.