China, long the world’s fastest growing economy, has stymied many an ambitious foreign business. In this detailed account, academics Lele Sang and Karl T. Ulrich unwrap eight case studies – four firms that faced tough going in China and ultimately flopped, and four brands that successfully navigated a tricky territory. The authors show how differently businesses operate in China, where the government is always present and interpersonal relationships are crucial. In this book, executives and entrepreneurs will discover that just because an approach works well in the West doesn’t mean it will work at all in China.
Amazon has conquered much of the world, but China proved to be beyond its grasp.
Amazon entered China in 2004, but despite years of struggles, the e-commerce giant never caught hold. By 2019, Amazon had left China entirely. The company started operating there by way of its $75 million acquisition of Joyo.com. However, the marriage was rocky from the start: Joyo’s team chafed at Amazon’s requirement that staffers speak English in the office and prepare for meetings by writing Amazon-style narrative memos. The Joyo team soon left. As Amazon made slow progress, electronics purveyor JD.com ramped up its strategy, broadening its scope to become a full-service retailer. Another Chinese company, Alibaba, also began to push back against Amazon. Meanwhile, the American company struggled to bend sellers to its will. In the United States, Amazon’s “Buy Box” displays an offer from a seller chosen by Amazon. JD and Alibaba’s Taobao, by contrast, displayed many products from many vendors. And JD and Taobao let sellers pay to move up in the listings, a feature not offered by Amazon. As a result, Chinese purveyors ditched Amazon for its rivals.