Amazon pulls out of China as it fails to compete with Alibaba

Ben StevensCompanies News

Amazon is set to scrap its online store in China as of July after struggling to make a dent in the market dominated by rivals Alibaba and JD.com.

The retail giant announced this morning that it will shut down its Chinese language site Amazon.cn and no longer provide services to sellers in the country as of July 18.

Instead of attempting to compete with the domestic giants on their home turf, Amazon has opted to shift its focus towards cross border trade, selling imported goods from the US and elsewhere in China which have proven more popular with Chinese consumers.

“Over the past few years, we have been evolving our China online retail business to increasingly emphasise cross-border sales, and in return we’ve seen very strong response from Chinese customers,” Amazon stated.

“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.”

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Chinese shoppers will still be able to shop for items sold by international merchants in the US, UK, Germany and Japan on its global store, and Chinese retailers will still be able to sell goods to buyers outside of China via Amazon.

It will also reportedly continue to offer its Amazon Web Services in the region, alongside its Kindle e-books and digital content.

Analysts have cited several reasons for the withdrawal, but primarily its rivals are able to provide a wider selection of goods and have a more developed distribution network, allowing them to deliver items faster and more efficiently.

It entered the market in 2004 after acquiring Joyo, which at the time was the country’s leading book retailer, later re-branding it Amazon China in 2011.

Until a few years ago it commanded a market share of around 15 per cent, but that has now plummeted to less than one.

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Ben StevensCompanies News

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