Amazon is shutting down its Chinese online marketplace this coming July. This means that the company will stop selling Chinese products on its online store and instead, will focus on offering the locals with items from overseas.
When the plan takes effect on July 18, those who are buying from Amazon's Chinese web portal will not see locally-produced items anymore. Instead, they will only be presented with a selection of goods from the site's global store.
According to China Daily, although Amazon is closing its Chinese online store, it will continue its operation on other ventures in China such as the Amazon Global Store, Global Selling which helps Chinese merchants to sell their products overseas, Amazon Web Services, a cloud computing platform, and Kindle e-book.
"Over the past few years, we have been evolving our China online retail business to increasingly emphasize cross-border sales, and in return, we've seen a very strong response from Chinese customers," the New York Times quoted Amazon said in a statement. "Their demand for high-quality, authentic goods from around the world continues to grow rapidly, and given our global presence, Amazon is well-positioned to serve them."
Moreover, Amazon stated that it will no longer compete with China's e-commerce big companies like Alibaba and JD.com. The company admits that most Chinese still prefer to shop from the said firms when it comes to local goods. Amazon is also reassessing its fulfillment strategy in China so that it can meet the customers' needs in the country.
Meanwhile, it was in 2004 when Amazon first entered the Chinese marketplace. As a first step, it purchased a local online bookseller for US$75 million and from there, the company invested in data centers, warehouses and encourage the local merchants to sell their goods via Amazon online marketplace.
As Amazon tried to expand its selling business in the Chinese region, it launched Amazon Prime that allows online buyers to get free unlimited cross-border shipping provided that they register in its membership program. With this, the locals are able to purchase items from foreign companies without worrying about shipping costs. However, since most people still opt to buy from Chinese sites, it appears that Amazon can't really compete with the leading Chinese e-commerce firms.
