Amazon admits defeat by Chinese e-commerce rivals Alibaba and JD.com

Amazon is closing its e-commerce business in the Chinese domestic market, vendors said Thursday. As of July 18, Amazon.cn will no longer be open to third-party sellers, which means it will no longer compete with the Chinese online trading giants, including Alibaba and JD.com. Amazon is still considering letting Chinese customers buy into international versions of the site, including the US, UK, German, and Japanese markets of the company. Amazon says it is re-evaluating its execution strategy in the country to meet these needs.

Amazon tells The edge In a statement, "In recent years, we have expanded our online retail business in China to put more emphasis on cross-border sales. In return, we were very well received by Chinese customers. Their demand for high quality genuine products from around the world continues to grow rapidly and, given our global presence, Amazon is well positioned to serve them. "

He notes that the business will continue in China in the form of its cloud computing division, Amazon Web Services, the sale of Kindle devices and e-book content and accessibility for third-party sellers in China. who want to reach global buyers. Amazon will also continue to operate a limited and less expensive version of its premium subscription in China, which does not include the benefits of video-on-demand.

Amazon entered China quietly in the early 2000s, but ultimately failed to compete with competitors offering a low, often free, shipment without requiring users to meet a minimum of orders. Amazon, in comparison, demanded that its customers reach a minimum of 59 yuan to 200 yuan ($ 8.79 to $ 29.81), depending on whether the item was eligible for the first prize.

Chinese consumers, often spoiled by the fact that vendors are paying for shipping costs and offering overnight delivery in the same province, have chosen domestic companies like Alibaba's Tmall and Taobao. Amazon.cn holds only 6% of the Chinese e-commerce market, according to The Wall Street Journal, citing Nomura Securities. When I visited China last year, for example, I was able to relegate to the night a telephone business from a Taobao salesman in the same province, and the order cost me only a few dollars, which made it placed far below the minimum required by Amazon for free shipping.

According to WSJ Amazon could merge its China operations with Kaola from NetEase. NetEase is known for partnering with Blizzard Entertainment to exploit local versions of World of Warcraft and Overwatch in China, it also operates Kaola.com, an e-commerce platform that sells badorted products, including diapers, cosmetics and Beats headphones. If a merger were completed, Amazon would lose its name and operate under Kaola, but could continue to generate profits in the region. Amazon declined to comment on potential merger projects.

Similarly, eBay has failed in China after investing hundreds of millions of dollars in domestic services in the country. After three years, eBay sold its business in 2006 and has not had access to it since. Similarly, Walmart has folded its Chinese operations in JD.com after years of trying to seduce its Chinese customers.

Apart from e-commerce, other technology companies competed with their domestic competitors, all with a similar conclusion: Google vs. Baidu; Facebook against WeChat; Apple against Huawei, Oppo, Vivo and Xiaomi; and Uber versus Didi Chuxing, a rivalry that pushed Uber to sell its business in China to its main competitor in the domestic market and effectively admit defeat.

Conversely, the Chinese giants meet a rare success abroad. AliExpress, similar to Amazon.cn, is Alibaba's effort to sell to Western consumers, but is still fighting to compete with Amazon in court.

Nick Statt contributed to this report.