Singapore: 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 US$75mil.
Since then, it’s invested in warehouses, data centres, and programmes to teach Chinese sellers how to get their goods to Amazon customers.
It launched its Prime membership programme 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% market share in China, according to iResearch. — Bloomberg