Amazon is closing its e-commerce business in the Chinese domestic market, vendors said Thursday. As of July 18, Amazon.cn will no longer be open to third-party sellers, which means it will not compete with the huge e-commerce giants in China, including Alibaba and JD.com. Amazon is still considering letting Chinese customers buy international versions of the site, including the US, UK, German, and Japanese markets of the company. Amazon said it was reassessing its execution strategy in the country to meet those needs.
Amazon tells The edge In a statement, "In recent years, we have expanded our online retail business in China to enhance cross-border sales, and we have been very well received by Chinese customers. Authentic high quality products from around the world continue to grow rapidly and, given our global presence, Amazon is well positioned to serve them. "
It notes that the business will continue in China in the form of its cloud computing division, Amazon Web Services, the sale of Kindle devices and e-book content, and accessibility to third-party vendors. in China who wish to reach global buyers. Amazon will also continue to operate a limited and less expensive version of its premium subscription in China, which does not include the benefits of video-on-demand.
Amazon entered China quietly in the early 2000s, but it could not compete with competitors offering low, often free, delivery without requiring users to meet a minimum of orders. Amazon, in comparison, required customers to earn a minimum of 59 yuan to 200 yuan ($ 8.79 to $ 29.81), depending on whether the item was eligible for the First Prize.
Chinese consumers, often spoiled by the fact that sellers swallow shipping costs and offer overnight delivery in the same province, have chosen domestic companies like Alibaba's Tmall and Taobao. Amazon.cn holds only 6% of the Chinese e-commerce market, according to The Wall Street Journal, citing Nomura Securities. When I visited China last year, for example, I was able to spend the night at a Taobao seller in the same province, and the order cost me only a few dollars , which is far from the minimum required by Amazon for free shipping.
According to WSJ Amazon could merge its China operations with Kaola from NetEase. NetEase is known for partnering with Blizzard Entertainment to exploit local versions of World of Warcraft and Overwatch in China but it also works Kaola.com, an e-commerce platform that sells assorted products, including diapers, cosmetics and Beats headphones. If a merger were completed, Amazon would lose its name and operate under Kaola, but could continue to generate profits in the region. Amazon declined to comment on potential merger projects.
Similarly, eBay has failed in China after investing hundreds of millions in domestic services in the country. After three years, eBay sold its business in 2006 and has not had access since. Walmart has also refolded its Chinese operations in JD.com after years of trying to woo Chinese customers.
Apart from e-commerce, other technology companies competed with their domestic competitors, all with a similar conclusion: Google vs. Baidu; Facebook against WeChat; Apple against Huawei, Oppo, Vivo and Xiaomi; and Uber against Didi Chuxing, which is a rivalry that resulted in Uber sells its business in China to its main national competitor and actually admitting defeat.
Nick Statt contributed to this report.