Amazon Open for Business on Alibaba’s Tmall

Amazon is pushing its expansion into China through a somewhat unexpected channel.

The largest American e-commerce player has opened a flagship store on the online market of its Chinese counterpart – the Alibaba Group Holding online platform.

Amazon’s new offering, located on Tmall, covers a limited number of product categories so far, including imported food, women’s shoes, toys and kitchen appliances. Discounted items include Crayola crayons and Lego bricks.

By signing the agreement with Alibaba, Amazon has essentially become a merchant customer and will pay Alibaba a commission on each of its transactions. But with Amazon struggling to gain a foothold in the vast and growing Chinese market, the transaction commissions could be worth it. Amazon had just 1.3% of the total business-to-consumer sales market in China, down from the 13.8% it controlled in 2008.

And while Alibaba is Amazon’s biggest local competitor, it’s definitely not the only one. Also lurking in the background are companies like JD.com – offering a direct-to-consumer model that more closely resembles Amazon’s approach to Alibaba-powered e-commerce.

An Alibaba spokeswoman said the company welcomes Amazon into its ecosystem Wall Street Journal.