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Wheelings & Dealings: Amazon Invests $20 Million in Chinese Food Vendor

TMCnet Feature

May 21, 2014

Wheelings & Dealings: Amazon Invests $20 Million in Chinese Food Vendor

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By David Gutbezahl
TMCnet Contributing Writer

Who could imagine that what once started out as an online bookstore would grow to become a mega corporation bent on world domination? Perhaps there isn't anything so sinister about Amazon's goal of becoming one of the largest supplier of, well everything, but it seems as if they really are working toward ruling the minds of consumers across the world.


Amazon has been selling more than books for years, but over the last year they have expanded to a market that nobody would suspect: Food. Almost a year ago, Amazon opened the doors of its version of an online grocery store for the West Coast, AmazonFresh. A few months later they released Prime Pantry, a service that allows anyone across the country to buy packaged foods and grocery store products like laundry detergent. Amazon's experience with their two food services seems to be positive, as reports have it they are taking further steps into the world of online groceries, but this time they are going international.

A report on May 19 by tech blog Technode revealed that Amazon has invested $20 million in an online food vendor based out of Shanghai, China, Yummy77. As part of the deal, Amazon will be receiving a minority stake in the company. Yummy77 will still retain control of itself, without Amazon stepping in to make any changes to operations.

Yummy77 is only a little over a year old, but in the last year they have made over $16 million. The money from Amazon will help the new business develop its offerings further, while possibly assist them in expanding outside the Shanghai area.

The partnership between Amazon and Yummy77 will also allow the two businesses to share technological expertise. Doing so could help Amazon further develop its own food services.

The investment is a big deal for Amazon, as it is the first time Amazon has made an investment in a Chinese business. Amazon has been pushing forward in the Chinese markets recently, with the release of their cloud-based Amazon Web Services (News - Alert) in China.

Amazon's services are not widespread in China, and the online giant has quite a bit of competition. Could this investment be a first step for the US-based company in becoming a real competitor in the Chinese market, and further its goals of world domination?




Edited by Maurice Nagle


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