Amazon has given up the fight with the Chinese e-commerce websites to capture the domestic markets. The Seattle-based e-commerce website said on Thursday that it will be shutting down its marketplace on Amazon.cn, which connects mainland Chinese buyers and sellers, while its local units will remain intact.
“We are working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible,” an Amazon spokesperson told TechCrunch, adding that this segment of the business will end on July 18.
The retreat from Amazon, first reported by Bloomberg and Reuters, came as a result of the relentless e-commerce race in China where websites like Alibaba and JD.com are dominant, with newcomer Pinduoduo closing on their heels.
However, this does not mark the end of Amazon in China, as the American giant has been able to set up relations with waves of cross-border sellers over the years of its presence in China. Many of these cross-border sellers have hailed from China’s traditional export industry looking to sell cheaply manufactured goods to buyers around the world for a lucrative margin. Currently, Chinese suppliers are able to sell to 12 countries that include India, Japan, Australia, Canada, the United States, and five Western European countries.
Other major e-commerce websites have their eyes on the massive raft of goods flowing out of China as well, though each have their focus on a different demographic section. For instance, Alibaba-backed Lazada serves as a bridge between Chinese merchants and Southeast Asian shoppers, while Jumia, which just listed in the U.S., exports from China to Africa.
Meanwhile, middle-class consumers have now started to demand high-quality products and as a result, China has grown a big appetite for imported goods. Amazon has its name in the import business too, but it lags behind compared to more entrenched players such as Alibaba, 29 percent market share of which is acquired by T-mall Global, according to data from iResearch.
However, Amazon might see a change in data if it finds a prominent local partner. Amazon was rumored to reportedly be in talks to merge its import unit with Kaola, the cross-border shopping business run by Chinese internet giant Netease with a 22.6 percent market share.