Amazon.Com, Inc. (NASDAQ:AMZN) Expands Its Operation in China- Enters the Shanghai Free Trade Zone

Sources have it that Amazon.com, Inc. (NASDAQ:AMZN) will open up its shop in the free trade area of China, the Shanghai trade zone. The free zone is an area with less scrutinized regulations. The company will be taking advantage of the free zone in order to expand its operations and sell a wide variety of products in the country of China.

This move made by Amazon.com, Inc. (NASDAQ:AMZN) suggests that the biggest online retailer in the world not only plans to stay in China but it also wants to expand its operations in the respective country. It is pertinent to note here that the e-commerce market of China is dominated by Alibaba Group Holding, the biggest e-commerce company in China, and JD.com, the second largest player in Chinese e-commerce sector.

According to Xinhua, Amazon.com, Inc. (NASDAQ:AMZN) recently signed a memo stating that it will cooperate with government to develop and further the goals of expanding cross border trade in the free trade area. Xinhua further stated that Amazon.com, Inc. (NASDAQ:AMZN) will expand its operations in China by introducing full range of its global products in the respective country.

However, the date as to when Amazon.com, Inc. (NASDAQ:AMZN) will set up its store in China is not confirmed yet, for the spokespersons of the company could not be reached for comments on this latest news.

Amazon.com, Inc. (NASDAQ:AMZN) also plans to introduce its cloud computing services in the country of China. The company, in December 2013, announced that China will have its own Amazon Web Services sector to improve the cloud computing speeds for the corporate clients.

Although Amazon is expanding its operations in China, but the expansion has come with a price. The company, during its second quarter, reported a loss of $126 million. As for the third quarter, the company predicts a loss of $410 to $810 million.

According to Diego Piacentini, Amazon’s vice president of International Consumer Business, the company must take advantage of this wonderful and strategic opportunity in order to expand its operations in the country of China.

Foreign companies operating in China often face the problem of fake goods. Amazon.com, Inc. (NASDAQ:AMZN) also became a victim of this problem. However, the company, in March 2014, in order to strengthen its online sales record, closed down one of its stores that a third party was running.

China introduced its free trade zone last year. Since then, a number of companies have opened up their stores in that region. Although Amazon.com, Inc.’s (NASDAQ:AMZN) move has come after almost a year, but the analysts are confident that the company will gain much popularity and success in the country of China.

Coming to the stock prices of Amazon.com, Inc. (NASDAQ:AMZN), the company, on the last trading day, August 20, 2014, started its stocks at a price of $334.68 and closed at an increased price of $335.78. The company has a market capitalization of $154.84 billion with a price to earnings ratio of 882.35.