Amazon might be growing leaps and bounds in most of its markets, but China has been hard to track, with local competition making things difficult for it.
Because of which, the Jeff Bezos owned e-commerce giant has decided to cut its losses from the online business by shutting down the online shopping vertical for businesses and consumers in the country.
According to a Reuters report on Wednesday, Amazon’s online store in China will be shutdown by 18 July this year. The company has reiterated that it will continue to run its cloud business in one of the biggest economies in the world.
Amazon’s decision is a no-brainer, especially when the market is majorly controlled by two domestic players – Alibaba Group Holding’s Tmall marketplace and JD.com with over 80 percent market share.
Quoting an Amazon spokesperson, the Reuters report mentioned that sellers on the platform are being notified of the closure, both as a marketplace as well as seller services on Amazon.cn.
The development means shoppers in China won’t be able to buy from third-party sellers in the country, but they can continue to shop on Amazon from its global websites. This news will come as a shock to merchants on Amazon.cn, but the company is hopeful that giving them a 90-day window to find alternative business options will keep them in good stead.
The changes from Amazon can be attributed to multiple factors. People quoted in the Reuters report feel that Amazon didn’t stand a chance against its competition, which has been able to deliver goods faster and with better discounts.
Also, people in the country didn’t really feel the need to shop on Amazon, unless they wanted to buy something which wasn’t available in China. What also doesn’t help is the lack of growth in the Chinese e-commerce space over the past few quarters.
China’s loss will work in favour of countries like India that has become the focal point for global giants like Amazon, which is in a close battle with Walmart-owned Flipkart.