Amazon is shutting down its China marketplace business. Here’s why it has struggled

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Amazon is shutting down its China marketplace business. Here’s why it has struggled

Queenie Liao, an office worker in Guangzhou, China, shops online several times a week. Alibaba’s Taobao and JD.com are her go-to platforms, but it wasn’t always that way.

Amazon was one of the first online shops in China and a lot of friends told me that the things from Amazon were much more trustable. That’s why I used it,” Liao told CNBC. “Taobao and JD have more items now.”

Her shift in attitude underscores one of the major reasons why Amazon is thought to be struggling in China. The U.S. e-commerce giant now plans to close its domestic marketplace business in China.

“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 company said in a statement, referring to its Chinese-language site, according to the Financial Times.

“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. 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,” the company added.

Customers in China will still be able to buy items from the U.S., Germany, Japan and the U.K. through Amazon’s global site as it focused more on cross-border sales into the world’s second-largest economy, according to an earlier Reuters report. Amazon’s cloud business will reportedly continue to operate in China.

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