China’s electronics appliance maker GOME and Amazon have entered a strategic partnership, they announced last week.
As a top home appliance retailer in China, GOME operates 1,800 offline stores across more than 400 cities in China. Its offline and logistics resources will allow Amazon to upgrade their logistics services, especially into lower- tier cities. The offline retailer plans to set up a dedicated supply chain team for Amazon’s projects, the firm added.
Under the deal, GOME has opened a store on Z.cn, Amazon’s Chinese-facing online marketplace. The products on sale currently include traditional home appliances, but the company aims to introduce 10,000 product categories by the end of this year, according to a company statement. The services will start in Beijing and to cover first- and second-tier cities later this year.
Additionally, the two parties will cooperate in the development of supply chains, logistics and after-sales service.
Like most brick-and-mortar stores in China, GOME is having a tough time as more consumers are buying online through the country’s extensive e-commerce network. This tie-up is a major move for the firm as they look to integrate online and offline shopping experiences.
GOME will also gain access to more high-end customers through the partnership. An Amazon report shows that over 90% of cross-border shoppers, which constitutes a great proportion of Amazon’s clients, have bachelor degrees or higher.
Last year, Alibaba Group inked a similar partnership with Suning Commerce, a major rival of GOME, through a $4.6 billion investment to crate synergies in e-commerce and logistics.