Amazon Is Preparing to Close a Chinese E-Commerce Store
(Bloomberg) -- In a rare retreat for Amazon.com Inc., the e-commerce giant plans to shut down its Chinese marketplace business in July as it shifts its focus to offering mainland consumers overseas products rather than goods from local sellers.
Amazon will keep running its other businesses in China, including Amazon Web Services, Kindle e-books, and cross-border operations that help ship goods from Chinese merchants to customers abroad. Starting on July 18, customers logging in to Amazon's Chinese web portal, Amazon.cn, will only see a selection of goods from its global store, rather than products from third-party sellers.
Pulling out of Chinese e-commerce represents a setback for the company in the world's largest retail market and for Chief Executive Officer Jeff Bezos, known for his willingness to weather losses to achieve long-term gains. It's also the latest example of an American tech company in China struggling to contend with local leaders like Alibaba Group Holding Ltd and JD.com Inc., as well as group buying app Pinduoduo Inc., which went public in New York last year.
Amazon entered China in 2004, when it bought a local online book seller for $75 million. Since then, it's invested in warehouses, data centers, and programs to teach Chinese sellers how to get their goods to Amazon customers. It launched its Prime membership program in China in 2016 with hopes of luring customers with promises of high-quality Western goods and perks like free international deliveries. But extra perks like Prime Video, which has been used to woo customers in other markets, aren't available to users in China.
Alibaba, JD and other Chinese platforms also ramped up their offerings of everything from American cherries to Australian baby formula with steep discounts. Amazon still has less than 1 percent market share in China, according to iResearch.
The pullback is the latest sign that Amazon is ceding China so it can focus on India, where it stands a better chance of becoming a dominant player. The company has plowed billions of dollars into the India business since opening its website there in 2013, building more than 50 warehouses to support the business.
But Amazon still has to contend with Chinese e-commerce players in India, where Alibaba and others are building up operations or investing in local startups such as Paytm E-commerce Pvt and BigBasket.
For now, Amazon's commitment to China remains strong and it will continue to invest in the country, according to a company spokeswoman. She said it has been shifting the focus of its online retail business in the country to cross-border sales, which cater both to Chinese merchants selling to consumers abroad and to Chinese customers looking for high-quality goods from around the world.
To contact Bloomberg News staff for this story: David Ramli in Singapore at dramli1@bloomberg.net;Spencer Soper in Seattle at ssoper@bloomberg.net;Shelly Banjo in Hong Kong at sbanjo@bloomberg.net
To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Peter Elstrom
©2019 Bloomberg L.P.
With assistance from Bloomberg
-
Signature Play: The Classic Cocktail Is Dead. Or Is It?
Classic cocktails are disappearing from India's cocktail menus. But they're still being ordered, taught to bartenders and borrowed from. So, who's really having the last drink?
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
