Third-party sellers on Amazon.cn can no longer sell and receive services through the marketplace beginning 18th July.
Amazon have decided to end their eCommerce business in China due to the stiff competition with Chinese e-tailers like Alibaba and JD.com. The company would rather focus on cross-border trade which will benefit Chinese retailers who sell their products to overseas customers, and Chinese shoppers who love imported goods, especially those from the US, UK, Germany, and Japan.
In their official statement, Amazon said:
“Over the past few years, we have been evolving our China online retail business to increasingly emphasize cross-border sales, and in return we’ve seen very strong response from Chinese customers. Their demand for high-quality, authentic goods from around the world continues to grow rapidly, and given our global presence, Amazon is well-positioned to serve them.”
Amazon’s other business units, including Amazon Web Services and Kindle e-books, will continue to operate in China.
What did Amazon miss?
Despite spending massively on their logistics infrastructure in China and launching the Prime subscription program to attract more Chinese customers, Amazon failed to catch up with local eCommerce players in terms of delivery speed, according to the country’s analysts.
It’s also worth mentioning that their marketing strategy lacked the vigor demonstrated by the competition, especially during important shopping holidays in China, such as Singles Day. Alibaba and JD.com would always hold big sales promotions every year on Nov. 11.
Amazon entered China’s market in 2004 after acquiring Joyo.com, a local online shopping site, which was renamed to Amazon China in 2011. Their market share during their heyday reached 15%, but it has long dropped to 1%.
Would you tag the closure of Amazon China a major setback or a wise decision? Share your thoughts in the comments below.
As always, to your continued success,
Dave & Matt