Amazon China is about to stop selling local goods to local shoppers.
According to multiple financial-news services, the global e-commerce giant is about to announce the closure of its dedicated Mainland China store, however Chinese consumers will still be able to order goods from Amazon’s global store.
The dedicated Amazon China platform will close in July, meaning shoppers will no longer be able to buy goods listed by third-party local suppliers.
According to “people familiar with the matter” quoted by Bloomberg and the South China Morning Post, exiting the intensively competitive Mainland China market will allow Amazon to shift its focus to more lucrative businesses selling imported goods to Chinese and developing its successful cloud services operation.
The withdrawal comes 15 years after Amazon entered China, purchasing local online store Joyo.com for US$75 million. Seven years later it rebranded the site under its own banner.
The company estimates it will take about three months to close down its mainland fulfilment centres and delist local vendors as appropriate.
With Alibaba and rival JD accounting for a combined 82 per cent of the Mainland China online market, there was little room for Amazon to eke out a commercially viable market share within a reasonable time frame.
Michael Pachter, an analyst at Wedbush Securities, said Amazon was pulling out of the Chinese domestic market, “because it’s not profitable and not growing”.
“The domestic Chinese online retailers just have huge advantages that Amazon can’t compete with.”
Amazon has yet to officially confirm the China plan.