Amazon, the US ecommerce group, plans to ramp up its business in China by setting up operations in Shanghai’s new free-trade zone, allowing it to sell more imports, more cheaply to better compete with domestic rivals Alibaba and JD.com.

The retailer follows software company Microsoft and a string of banks into the 28 sq km free-trade zone, set up a year ago as a test bed for economic reforms. Amazon hopes that by setting up a logistics warehouse within the zone, thus enjoying lower shipping costs and freight times, it will boost its wafer-thin 2 per cent slice of the online shopping market.

“We’re going to have lower shipping charges, faster delivery coming into the free-trade zone, so there are going to be many benefits,” said Diego Piacentini , vice-president of international consumer business, speaking to Chinese television on Wednesday.