In a rare retreat for online major Amazon.com, the e-commerce giant is planning to shut down its Chinese marketplace business in July as it is shifting its focus to offering mainland consumers overseas products rather than goods from local sellers.
However, the other units of its local venture will stay intact which include Amazon Web Services, Kindle e-books and cross-border operations that help ship goods from Chinese merchants to consumers abroad.
“We are working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible. This segment of the business will end on July 18.” – Amazon spokesperson
The partial retreat is indicative of the race in China where Alibaba and JD.com dominate the market with newcomer Pinduoduo closing on the incumbents’ heels. Pulling out of Chinese e-commerce represents a setback for the company in the world’s largest retail market and for Chief Executive Officer Jeff Bezos.
This is the latest sign that shows Amazon is ceding China so that it can focus on India where is stands a better chance of becoming a dominant player. The company has invested billions of dollars into the India business since opening its website in 2013, building more than 50 warehouses to support the business.
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.
The Amazon Prime membership programme in China was launched in 2016 which was to woo the customers with high quality western goods and perks like free international shipping. But Prime Video which is available in other markets aren’t available to users in China.
Amazon still has less than 1 percent market share in China, according to iResearch.