On July 18th, Amazon will no longer operate a marketplace or provide seller services on its Chinese website. Sellers outside of China who are interested in continuing to sell on the platform to Chinese customers will be able to do so through Amazon Global Selling. Chinese shoppers will continue to be able to order from the US, UK, Germany and Japan.
Amazon bought a Chinese ecommerce platform in 2004 and rebranded it in 2011 as Amazon China. Amazon launched many of its products, like Amazon Web Services, Kindle e-readers and Prime memberships in the Chinese market. However, Amazon’s market share couldn’t match Alibaba Group Holding Ltd’s Tmall marketplace and JD.com Inc. In 2018, these two Chinese ecommerce sites controlled over 80% of the market. Amazon controlled less than 1%.
According to an article in CGTN, some of the disadvantages Amazon faces in China include:
- Amazon’s shipping is slower than its in-country rivals.
- The shopping experience and payment options offered aren’t very user-friendly for Chinese shoppers.
- The cultural differences of shopping in and outside of China. For example, Chinese shoppers prefer to interact with sellers online as they are making purchases. Alibaba typically replies instantly to customers. Amazon replies to customers via email, which can take hours or days.
- The difficult localization process for many US sellers operating in China.
The article also states that while Amazon will continue to face challenges in China with its Amazon Global Selling platform, there may be opportunities with China’s younger generations. Many of them have studied abroad or traveled and have become more accustomed to the online shopping experiences Amazon provides.