Amazon to Close Local Marketplace in China
Amazon has announced it will be shutting down its domestic marketplace in China by mid-July as it shifts focus to providing China with goods from other countries. Chinese shoppers will only be able to make purchases from the United States, United Kingdom, Denmark and Japan via Amazon’s global store. Although consumers will no longer be able to purchase goods from Chinese merchants, the Seattle-based e-commerce giant will continue to provide them with Amazon Web Services, Kindle e-books, and cross-border operations.
“We are working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible,” an Amazon spokesperson told TechCrunch.
Amazon’s hand in the Chinese marketplace began back in 2004 when it purchased local online book seller Joyo.com for $75 million. The company decided to rebrand Joyo.com to Amazon China and began investing in warehouses, data center, and several other programs including a Prime membership in 2016.
Despite their best efforts, Amazon's Chinese marketplace failed to resonate with shoppers the way Alibaba’s Tmall marketplace and JD.com have. In fact, the two dominant e-commerce providers accounted for 81.9 percent of the Chinese market in 2018. Alibaba’s annual online shopping holiday known as “Singles Day” also rakes in more sales than Black Friday and Cyber Monday combined.
"There is too much domestic competition and Amazon lacks the kind of brand awareness that Tmall or JD.com have," said Ben Cavender, an analyst at China Market Research Group. "That leaves Amazon in a position where it has to spend a lot of money to acquire customers while also competing aggressively with multiple strong players on price."