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Amazon purchases Chinese Joyo.com at US$75m
(Xinhua)
Updated: 2004-08-23 11:21
After quite a few of negotiations, China's non-State-run Joyo.com Ltd has
finally reached a deal with Amazon.com Inc, the US E-commerce giant, which
possibly meant a beginning of the foreign Internet companies' landing in China.
Amazon.com Inc announced the plan Thursday to pay US$75 million for Joyo.com,
who declared the deal on the same day. The 4-year-old Joyo.com, is China's
largest online retailer of books, music, videos, software, gifts and toys.
"The purchase is a sign of good news for China's E-commerce," said Li Tao, a
senior executive of another Chinese online seller 8848.com. "However, it might
only change Joyo.com's fate itself, not the E-business in China. I don't suppose
it would affect the whole industry in the country." he said.
Amazon has tried to buy Dangdang.com, a top B2C Chinese company, before it
planned to purchase Joyo.com, but failed due to its dominating stock share
strategy.
The deal is targeting the potentially huge Chinese market. According to
statistics released by CNNIC (China Internet Network Information Center), 58
percent of 87.5 million Chinese internet users favor online buy. The
fast-growing Chinese Internet market is estimated to be worth US$16 billion by
2005. By 2006, there will be 170 million netizens in China, while the number of
online buyers will hopefully rise from 6 million to 13.4 million.
According to the deal, Amazon.com would pay US$72 million in cash and assume
employee stock options to buy Joyo.com.
Amazon said Joyo's Web retailing operations in China are run by Joyo.com Ltd,
a British Virgin Islands company founded in 2000. It expects the deal to close
in the third quarter.
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