AUTOMATED NEWS ALERT
Amazon exiting Chinese marketplace sales – Reuters …
Amazon (AMZN +0.1%) will close its domestic marketplace business by mid-July, according to Reuters sources, which means Chinese shoppers will only be able to purchase from third-party merchants in other countries.
Apparently Amazon is hit hard by the Chinese giant competitor Alibaba but will still sell digital products. (Kindle)
The market seems to be quite crowded. According to research company, iResearch Global, Alibaba Group Holding’s Tmall marketplace and JD.com controlled 82 percent of the Chinese e-commerce market last year.
Readwrite.com analysed the reason behind poor performance of Amazon in China and they are considering that there are two markets in China: a browsing (window shopping market) and a buying market (as in consumer to consumer and direct brand sales).
Also, “Amazon is a prime example of a company which thought it could succeed in an entirely different market just by continuing to do business as usual without good market and customer analysis. This method of going about globalizing a product will almost never result in good success and analysts are actually calling for Amazon to pull out of China. It seems that Amazon’s executives are not willing to do the type of market research that will allow it to better speak to the Chinese consumer.”
It might be also the case that the recent trade war between USA and China had something to do with the exit. It is well known that Alibaba is China and the recent Huawei belligerency surely does not help.
The particularities of working in China, meaning the mandatory requirement of partnering with indigenous companies makes it easy for Chinese government to influence any company on its territory.
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*This Automated News Alert is brought to you by DIGITAL BUSINESS JOURNAL™ alongside top analyses on Europe’s digital business market. We are scanning large amounts of data from various business sources and select the most relevant headlines providing the reader with a comprehensive & updated outlook.
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