Amazon is shutting down its China marketplace business

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freemexy

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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.To get more amazon china, you can visit shine news official website.

“I used to use Amazon a few years ago. 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.Amazon entered the Chinese
market in 2004 through the acquisition of Joyo, a domestic online
shopping market. Joyo was rebranded to Amazon China in 2011. It enjoyed
success in the early days with market share of over 15 percent in 2011
to 2012, according to China-based analyst Choi Chun of iResearch. That
has now plummeted to less than 1 percent, according to another
China-based market research firm, Analysys.


As Liao mentioned, Amazon had a reputation in the early days of its China operation for being a site that would have legitimate products and
so was trusted by Chinese consumers. Chinese players like Alibaba
struggled with policing fake items on their sites. Chinese e-commerce
players, however, have been taking proactive measures to fight
counterfeit goNot only is Amazon trying to compete with e-commerce
giants like JD and Alibaba, who are often able to deliver goods to
Chinese customers faster, but smaller domestic like Pinduoduo and
VIP.com are also offering a challenge.


The U.S. giant has also not been as aggressive on the marketing front as some of its rivals. Alibaba and JD both do huge sales
promotions and big advertising campaigns on Nov.11 each year, known in
China as Singles Day.


Amazon said in its statement that it is emphasizing cross-border trade. While that may have been a unique part of the business in the
past, China’s domestic players have put a big focus on that in recent
years. In November, Alibaba announced plans to help global businesses
sell $200 billion in goods to China in the next five years. However,
analysts said Amazon can still compete for now.JD and Alibaba are better
positioned because they have larger traffic and consumers trust these
two platforms (relatively to other platforms). But one thing I need to
point out is that cross-border e-commerce in China is not as
consolidated as regular domestic e-commerce, online shoppers go to
different platforms for different overseas merchandises,” Chun told
CNBC. “Therefore, Amazon’s cross border e-commerce is still very
competitive.”


Chun said Amazon’s cross-border business is “not insignificant,” but the U.S. firm “doesn’t realize their problem in the Chinese operation
and doesn’t want to catch up.”“I don’t rule out the possibility that
Amazon’s cross-border business will follow the same path of Amazon’s
China domestic e-commerce business,” Chun said.

Posted 18 Oct 2019

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