Fri, Apr 19, 2019 - Page 10 News List

Amazon closing Chinese marketplace

NOT PULLING OUT:The company will keep its other businesses in China, but as of July 18, Amazon.cn is to feature items from its global store, not local third-party sellers

Bloomberg

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 Chinese 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 e-commerce in China 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 is also the latest example of a US tech company in China struggling to contend with local leaders like Alibaba Group Holding Ltd (阿里巴巴) and JD.com Inc (京東), as well as group-buying app Pinduoduo Inc (拼多多), which went public in New York last year.

Amazon entered China in 2004, when it bought a local online book seller for US$75 million.

Since then, it has invested in warehouses, data centers and programs to teach Chinese sellers how to get their goods to Amazon customers.

It launched its Prime membership program 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, are not available to users in China.

Alibaba, JD and other Chinese platforms also ramped up their offerings of everything from US cherries to Australian baby formula with steep discounts.

Amazon still has less than 1 percent market share in China, according to iResearch.

The pullback is the latest sign that Amazon is ceding China so it can focus on India, where it stands a better chance of becoming a dominant player.

It has plowed billions of dollars into the India business since opening its Web site there in 2013, building more than 50 warehouses to support the business.

However, Amazon still has to contend with Chinese e-commerce players in India, where Alibaba and others are building up operations or investing in local start-ups such as Paytm E-commerce Pvt and BigBasket.

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

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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