Amazon is conceding defeat in its contest to compete in China against local rivals such as Alibaba and JDcom and plans to close down its online retail operations that cater to Chinese consumers, according to reports.

The US e-commerce pioneer said that it will “continue to invest and grow” in other operations in China such as Amazon Global Store, Global Selling, Amazon Web Services (AWS), Kindle e-books and cross-border teams that help ship goods from Chinese merchants to customers abroad.

However, commencing July 18, the company’s Chinese website, Amazon.cn, will featured only diminished offerings sourced from its global network.

An Amazon spokesperson did not explicitly confirm plans to pull the plug on domestic e-commerce in China, but said the company was looking to focus more on cross-border sales.

“Over the past few years, we have been evolving our China online retail business to increasingly emphasise cross-border sales, and in return we’ve seen a very strong response from Chinese customers,” (s)he said in a statement emailed to AFP.

Amazon was making “operational adjustments to focus our efforts on cross-border sales in China”, the statement read.

Limited impact

Amazon has struggled to replicate its success across many of the world’s markets in China, where a host of effective competitors led by Alibaba and JD.com have capitalised on domestic supplier networks and a deeper understanding of Chinese consumers to establish a commanding market share.

The company has invested in logistics and acquired online bookseller Joyo in 2004 as part of its bid to make inroads into China’s retail market, but with only limited success. It had only a 0.6% share of Chinese business-to-consumer (B2C) online retail in Q4 of 2018, with Alibaba’s Tmall took 61.5%  and JD.com 24.2%, according to China-based internet consultancy Analysys.

Li Chengdong, founder of the Beijing-based internet financial research house Dolphin Think Tank, said Amazon had failed to adapt to what works in China, adding “Amazon has been unwilling to localise in China, which feels kind of arrogant.

“They still insist on American-style web pages and do not promote merchandise during the ‘Double 11’ shopping season, in which Chinese e-commerce companies Alibaba and JD put a lot of effort.”

‘Double 11’, aka ‘Singles’ Day’ is the equivalent of ‘Black Friday’ in the US, an annual sales day on which tens of billions of dollars’ worth of retail purchases are made.

Bloomberg News believes that Amazon’s focus overseas will now switch from China to India's growing market Amazon opened an India website in 2013 and has invested heavily in logistical infrastructure.