Summary of Amazon Exits China’s Online Marketplace in Defeat

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Despite Amazon’s strong momentum in global markets around the world, its performance in the China market has been underwhelming. After more than a decade of trying to find its footing in China, the company decided to shut down its Chinese online marketplace business. Li Ming, Tang Yahua and Wei Jia, writers for Chinese business news platform Ran Caijing, recount Amazon’s journey in China. In this well-structured, compelling narrative, they explain how Amazon.cn struggled to keep pace with the ever-changing industry – just like so many foreign companies before it. This report offers a valuable read for business executives and strategists of foreign companies operating in China and anyone interested in the curious phenomenon of global internet companies struggling in China. 

About the Authors

Li MingTang Yahua and Wei Jia are writers for Ran Caijing, a business and finance news platform offering in-depth report cards for businesses. 

 

Summary

Since the mid-2000s, China’s e-commerce companies have enjoyed a golden age. Nonetheless, international giant Amazon has struggled to find its footing in China. On April 18, 2019, Amazon China announced it would close its Chinese online shopping business, empty its inventory in its China warehouses, and shut down logistics and delivery operations. Going forward, Amazon China will focus on its cloud solutions unit Amazon Web Services, Kindle sales, and cross-border shopping that allows Chinese citizens to buy goods from abroad and Chinese merchants to sell their goods on Amazon’s international platform. Amazon’s journey in China is a case study bearing all the hallmarks of setbacks and pitfalls that a foreign company may encounter upon entering the market.

In August 2004, Amazon, already a global retail behemoth, swooped into the Chinese market with style and ambition. It acquired Chinese online book and music store Joyo.com for $75 million, making Joyo.com Amazon’s seventh-largest localized online store behind the United States, Canada, France, Germany, Japan and the United Kingdom. But Chinese industry leaders weren’t optimistic: The management and operations of...


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