Amazon entered the Chinese market in 2004 through the acquisition of Joyo, a national online sales market. Joyo was renamed Amazon China in 2011. It was successful in its debut with a market share of more than 15% between 2011 and 2012, according to analyst Choi Chun of Chinese company iResearch. This has now dropped to less than 1%, according to another China-based market research firm, Analysys.
As Liao mentioned, at the beginning of its activity in China, Amazon was famous for being a site offering legitimate products and to which Chinese consumers trusted. Chinese players like Alibaba have struggled to control fake articles on their sites. Chinese e-commerce players, however, have taken proactive measures to combat counterfeit goods.
Amazon not only tries to compete with e-commerce giants such as JD and Alibaba, who are often able to deliver products to Chinese customers faster, but smaller national companies like Pinduoduo and VIP.com also offer a challenge.
The American giant has also not been as aggressive in marketing as some of its competitors. Alibaba and JD both have huge sales promotions and major advertising campaigns on Nov. 11 each year, known in China as Singles Day.
Amazon said in its statement that it focuses on cross-border trade. Although this may have been a unique part of the business in the past, Chinese national actors have focused on this in recent years. In November, Alibaba announced plans to help global companies sell $ 200 billion worth of goods to China over the next five years. However, analysts said that Amazon could still compete for the moment.
"JD and Alibaba are better positioned because they have more traffic and consumers trust these two platforms (compared to other platforms)." However, it should be noted that e-commerce Cross-border in China is not as consolidated E-commerce and online shoppers are going on different platforms for different goods overseas, "Chun told CNBC. "Therefore, cross-border e-commerce from Amazon remains very competitive."
Chun said that Amazon's cross-border business was "not insignificant", but that the US company "does not realize its problem in the Chinese operation and does not want to catch up".
"I do not rule out the possibility that Amazon's cross-border business is following the same path as Amazon's domestic e-commerce activity in China," Chun said.
In its statement, Amazon said "its commitment to China remains strong."