Amazon to Acquire Chinese Online Counterpart

23 August 2004 has opened an oriental e-commerce portal by agreeing to purchase online Chinese rival for $75 million (€61m; £41m).

The deal gives Amazon its seventh global website, 100% ownership of Joyo and an important foothold in the growing Chinese internet market, which some predict to become the world's largest.

Figures from the China Internet Information Centre reveal that China's internet users have grown by 28% since last year to 87m by the end of June 2004. And online shoppers are expected to climb by over 190% in the next year.

Joyo was founded in 2000 by Chinese computer group Lenovo and software firm Kingsoft and is the largest online books, music and video retailer in China. With sales so far this year of $15.7m, it looks set to surpass last year's total of $19.3m.

Amazon follows Ebay, Yahoo! and Google in taking advantage of the eastern promise offered by China's rapid online development and improved payment systems. The three US internet firms recently acquired or took a stake in Chinese counterparts.

The Joyo purchase is Amazon's second attempt at entering the Chinese market, after its recent rebuff from Joyo's local rival [WAMN: 06-Aug-04].

The transaction will be paid mostly in cash ($72m) with the remainder provided by assuming employee stock options. It is expected to close in the third quarter of this year.

Data sourced from: Financial Times; additional content by WARC staff