E-commerce giant Amazon has announced plans to cease operation of its domestic marketplace business in China. This move is expected to take place in the middle of the month of July. The aim for Amazon is to focus on selling cloud services and overseas goods to China. This move comes as a result of the substandard performance of Amazon’s China marketplace.
When this decision takes effect, Chinese shoppers can no longer purchase goods from China-based suppliers through Amazon. However, they have the option to make use of existing worldwide locations through Amazon’s global store. These locations include Japan, Denmark, and the United States of America.
Amazon intends to complete this move on schedule and is beginning with ending support for Chinese merchants over the next 90 days. During this time of winding down support, fulfillment centers are also going to be closed. As physical goods are the targeted commodities in this move, cloud offerings are expected to remain intact. Therefore, Chinese customers that make use of services such as Amazon Web Services (AWS), Kindle e-readers, and other online services can breathe a sigh of relief. New customers can opt into these online services as well.
Amazon’s China marketplace came about as a result of the company’s $75 million 2004 purchase of joyo.com, which was an online shopping platform in China. In 2011, it was then rebranded as Amazon China, with the intention of gaining traction in the country’s e-commerce market. While there is an impressive library of offerings from merchants that are local and external to China, the venture was and is struggling. The fierce competition from more established Chinese e-commerce platforms such as Alibaba meant that Amazon was unable to get a foothold in the market. It was reported by iResearch Global, a consumer insights company, that the combined market share of competitors Alibaba and JD.com was 81.9 percent in 2018.
Engaging sentence: A key attribute of any good company is the ability to refocus in this way after such a titanic failure.