AMAZON CLOSING CHINA ONLINE STORE
US e-commerce giant struggles to dislodge homegrown rivals Alibaba and JD.com
AMAZON.COM Inc said it will shut its China online store by July 18, as the United States e-commerce giant focuses on the lucrative businesses of selling overseas goods and cloud services in the world’s most populous nation.
The move underscores how entrenched, homegrown e-commerce
rivals have made it difficult for Amazon’s marketplace to gain traction in China.
Consumer research firm iResearch Global said Alibaba Group Holding’s Tmall marketplace and JD.com controlled 82 per cent of the Chinese e-commerce market last year.
An Amazon spokesman said yesterday that it was notifying sellers that it would no longer operate a marketplace nor provide seller services on Amazon.cn.
Sources familiar with its plans had said a day before the company had planned to make such a move.
“We are working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible,” said the spokeswoman in a statement.
“Sellers interested in continuing to sell on Amazon outside of China are able to do so through Amazon Global Selling.”
The sources said Amazon shoppers in China would no longer be able to buy goods from third-party merchants in the country, but they still would be able to order from the US, Britain, Germany and Japan via the firm’s global store.
Amazon would wind down support for domestic-selling merchants in China in the next 90 days and review the impact on its fulfilment centres in the country, some of which it might close, said one of the people.
“They’re pulling out because it’s not profitable and not growing,” said analyst Michael Pachter at Wedbush Securities.
Ker Zheng, marketing specialist at Shenzhen-based e-commerce consultancy Azoya, said Amazon had no major competitive advantage in China over its domestic rivals.
Unless someone is searching for a very specific imported good that can’t be found elsewhere, “there’s no reason for a consumer to pick Amazon because they are not going to be able to ship things as fast as Tmall or JD”, he said.
The Amazon spokesman said the company would continue to invest and grow in China through its Amazon Global Store, Global Selling, Kindle e-readers and online content.