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Is Amazon Retreating China?

2019-07-03 12:20 Wednesday


Amazon plans to shut down its business in Chinese marketplace since July 2019, the E-commerce giant claims that it will shift its focus to offering mainland consumers overseas products rather than goods from local sellers.

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That doesn’t mean Amazon will stop its operation in China, business including Amazon Web Services, Kindle e-books, and cross-border commerce will still keep running. But from 18 July, only goods from Amazon’s global store are available for Chinese customers, and products from third-party sellers will not be provided.

Amazon entered China in 2004, its retreat represents a setback for the company in the world’s largest retail market. 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 launched its Prime membership programme in China in 2016 in hopes of attracting customers with promises of high-quality Western goods and add-on service like free international deliveries.

Amazon’s quit is the latest sign that Amazon is moving its focus from China to India, where it stands a better chance of becoming a dominant player. The company has poured billions of dollars into the India business since opening its website there in 2013, building more than 50 warehouses to support the business.

But Chinese e-commerce players are also dominant in India market, and Alibaba and others are building up operations or investing in local startups such as Paytm E-commerce Pvt and BigBasket. So Amazon also has to face great competition pressure from them even in India.

According to a company spokeswoman, Amazon’s commitment to China remains strong and it will continue to invest in the country. 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.

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