Amazon China marketplace is shutting down
Amazon is planning to wind-down its Amazon China marketplace to focus on cross-border sales and is working to shift customers to its Amazon Global Store and sellers to its Global Selling operations, an Amazon spokesperson confirmed to Retail Dive in an email Wednesday.To get more amazon china, you can visit shine news official website.
"As part of this shift, we are notifying sellers we will no longer operate a marketplace on Amazon.cn and we will no longer be providing seller services on Amazon.cn effective July 18," the spokesperson said. "We are working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible. Sellers interested in continuing to sell on Amazon outside of China are able to do so through Amazon Global Selling." Kindle devices, digital content and Amazon Web Services cloud operations will continue to be available in China, according to the Amazon spokesperson.
"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 very
strong response from Chinese customers," the Amazon spokesperson also
said. "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. Amazon continues to make operational
adjustments to focus our efforts on cross-border sales in China and to
keep improving the experience for both Chinese customers and our global
selling partners."
Dive Insight:
Amazon has emphasized cross-border sales in China for a while now. In a 2017 report, Amazon China said that its operations were seeing rapid growth in those sales and that Chinese consumers were interested in the premium products available through Amazon’s global marketplace, according to an analysis of the report from Chinese news site Waonews.Also in that report, Gu Fan, vice president of Amazon China, said: "Amazon continues to push forward the international brand strategy. By creating the industry's unique cross-border direct mail mode, it has brought over 10 million overseas brands to Chinese consumers."
Earlier this year, Amazon China was said to be in talks with Chinese e-commerce player NetEase Kaola, according to a note from Instinet analysts emailed to Retail Dive. An Amazon spokesperson declined to comment, saying in an email that the company doesn't "comment on rumors or speculation."
Online cross-border retail in China rose 28.9% quarter over quarter the fourth quarter of 2017 to $16.53 billion, according to China Internet Watch. Alibaba's Tmall global operations led with 27.6% market share, followed by NetEase Kaola (20.5%) and JD Global (13.8%), according to the report.
Whether the company goes it alone or in an alleged partnership with Kaola, the shift in strategy comes as Amazon has faltered in China. The e-commerce company "made a series of uncharacteristic missteps" in China, according to Michelle Grant, head of retailing at Euromonitor International. "Although it has grown sales consistently, its share of sales has actually been dropping," she told Retail Dive in an email. "At its peak in 2009, it had 8% of the market, in 2018, it only has 1%. The company faced fierce competition in Alibaba, which always operated a marketplace model, and JD.com, a traditional e-commerce player that later added a marketplace."
Those players made moves that helped them stand out, while Amazon didn't. In fact, Amazon itself has a storefront on Tmall, she also noted. "Alibaba differentiated on wide selection at a range of price points while JD.com emphasized quality products delivered quickly," she said. "Both companies understood the importance of digital payments with Alibaba developing Alipay and JD.com using WeChat Pay. Amazon didn't have any differentiation in the eyes of the Chinese consumers. The fact that Amazon opened its own digital storefront on Alibaba's Tmall in 2015 may be the strongest indication that Amazon would likely wind down its domestic sales operations."
"With the domestic market locked up by Alibaba and JD.com (combined they control 75% of the ecommerce market in China), it makes sense for Amazon to focus on its true differentiator: cross border sales," Grant said. "But Alibaba and JD also have robust cross border sales platforms. It's not guaranteed that the focus on cross border sales in the market will succeed either."
A new law in China governing e-commerce that went to effect in January promises to enable the move, in part by lowering taxes and fees. "[T]he E-commerce Law also states that China supports the development of cross-border e-commerce (CBEC) and emphasizes the importance of establishing a mechanism to facilitate CBEC transactions and streamline operations," according to a report from Fung Business Intelligence emailed to Retail Dive.
"Against a backdrop of growing protectionism and a pushback against globalization, China's pledge to increase imports marks an important step for the country to promote the multilateral trading system, while transitioning to the stage of high quality development," Fung analysts also wrote. "Expanding imports can better satisfy new consumer demand, especially for quality products and services, thereby achieving consumption upgrading and supply-demand optimization. To meet the new needs of consumers, retail operators are increasingly adopting a global sourcing strategy to differentiate their product offerings.
