Amazon has been both vocal and quiet about their relationship with China. Given the recent change in the US government, and policies yet to come, the question of how big of a role China plays in the Amazon business is very interesting.

We always wanted to research this topic, but given the way Amazon.com marketplace functions we've never been able to. The issue is that sellers on Amazon.com are not required to disclose their business information, nor is the seller name required to be related to their business name. We wrote more about this in the Verified Sellers opinion-piece. Because of the growth of Fulfillment by Amazon (FBA) program, which allows inventory to be stored in Amazon warehouses, it has become impossible to tell where the seller is located - even foreign sellers are using the FBA service.

But things are different in Europe. Sellers (and any other retailer) there are required to disclose their business information. So we combined seller information with their business details in all European Amazon marketplaces.

We found that 25 percent of sellers are based in China. This is based on combined average of the 5 European marketplaces (UK, Germany, France, Italy, Spain), and counts active sellers only (at least one feedback rating a month).

In a study last year, Payoneer interviewed 900 Chinese sellers and found that 62 percent of respondents are selling on Amazon marketplaces. Of the 62 percent figure, 91 percent sell on Amazon.com in the US. Which means the 25 percent we calculated for European marketplaces is likely even larger in the US. The result is a speculation, since US and European marketplaces are not the same thing, and especially the US marketplace is much bigger. But given that Chinese sellers are interested in selling in the US the most, the ratio here should be the same or even higher that of Europe.

Out of those, more than 50 percent use Fulfillment by Amazon (FBA). Which means that from the customer point of view it's all the same experience. But for other sellers this should be a threatening figure because it will be hard to compete with them.

What's also interesting is that the ratio of Chinese sellers using FBA compared to the total ratio of FBA users is much higher. Meaning that while only 35 percent of all sellers are using FBA, 50 precent of Chinese sellers are using it. For Chinese sellers FBA is the key feature allowing them to compete with domestic sellers.

The takeaway from this research is not the exact percentage of Chinese sellers. It's the fact that there are more Chinese sellers than one might assume, they are very competitive because of FBA, and the percentage is no doubt growing.

This topic has been gaining wider interest too. In an article titled "Made in China — and straight to your Amazon box" USA Today wrote:

"Amazon’s helping. On Dec. 7 it held a summit for sellers in Hangzhou, China that attracted close to 1,500 attendees. The theme was shifting from a “Made in China” mentality to a “China quality” mentality, using a clever pun on the two phrases, both of which are pronounced zhidao."

While many might not be aware of that, products can be imported to Amazon FBA straight from China. A container worth of goods can be sent directly to Amazon, avoiding many additional layers of extra hands. This produced faster import speeds, more competitive pricing, and once Chinese companies learned about it - huge growth of China imports.

Amazon is not outspoken about it in the US market, but clearly they see a big upside in connecting with Chinese companies. In Amazon Is an E-Commerce Infrastructure Company, Not a Retailer article we wrote:

"The Amazon marketplace as it stands right now is largely consisting of retailers. But the trend we have been noticing for a while, and the vision this Amazon event is showing, is the ultimate rise of manufacturers participating in it. Amazon has always been focused on cutting out middlemen - they don't want to be one, nor they want them on the platform."

In this vision of removal of middleman and direct-to-consumer, should Amazon source straight from the manufacturer in China? Time will tell.

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