Why Amazon's Marketplace Failed In China

Amazon later pushed heavily on its e-reader and tablet product offerings, but China's complex regulatory approval caused years-long delays. Between 2011 and 2012, Amazon's held a market share of around 15% in the country but later plunged to less than 1% by 2019, according to iResearch. Amazon officially closed its China marketplace in 2019 but keeps, among other businesses, its Amazon Web Services, Amazon Global Logistics and Amazon Advertising.

Chapters:
1:48 Ch. 1 - Amazon's early efforts in China
3:57 Ch. 2 - Why it failed
9:01 Ch. 3 - Ongoing efforts in China — and beyond

Produced by: Jade Tungul
Senior Managing Producer: Tala Hadavi
Graphics by: Mallory Brangan, Jade Tungul
Additional Sources: Amazon, Securities and Exchange Commission, Alibaba Group, JD.com, Reuters

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Why Amazon's Marketplace Failed In China

[VechoBryant]

Wait, you think that reason of Amazon's fall is due to Chinese regulation on Kindle ? It is ridiculous. Kindle is just a such tiny tiny product in the whole e-commerce market.

[jasonhp]

It has nothing to do with kindle. Amazon just can’t catch up with the rapid growth of the market. The shopping experience is terrible and takes years to make any change while others are evolving almost every week.

[nickl]

Amazon also experienced the same thing in south east asia. Perhaps even worse. Amazon had the whole of SEA to itself for nearly 15 years. However it did not pay attention to its customers. Nor did it even try to make the experience seamless. Selection was limited and it as very hard to buy things online. Everything, even stuff from China or a country next door seems to have to go to the US before coming back, making the shipping cost impossibly high. Sure it got better over time... slowly. But when native online stores emerged, they quickly drove out Amazon.

[gameralove]

from my experience in china. i feel like they don't need other choices bc they have much better options.

[chengong]

On any Chinese shopping app, I click into an item and scroll down, there’s going to be lots of full width images showing every detail. I click into an Amazon item, there’s only a tiny image on the left side of the screen, if I try to click on it that opens another window, and the image is STILL NOT FULL WIDTH. I mean what is Amazons problem with showing me the freaking product in more detail?

[SuperPaulNYC]

In such a competitive sector in China which combines retail and internet technology, Amazon doomed to fail when it had to make all major decisions at its HQ in Seattle.

[syncmastern]

Amazon is basically an e-commerce monopoly in the US and perhaps the rest of the world. Whereas in China, the e-commerce industry is very competitive, as seen in the pie chart @.4:36. So if you ask which country, China or the US, does capitalism better, i would have to say China in this regard.

[yuzhang]

I think this piece got the most right. Amazon didn't have a strategy for China, they thought the same strategy made them successful in US can win in China. The other side of the same coin, they were out competed on every aspect of eCommerce, convenience, speed and etc. They haphazardly went to China and had a heavy dose of hyper-competition in China.

[lexluthor]

While I do appreciate the fact that Amazon hadn't squish a million side services (video streaming, cash back, financial services, mini games) onto their website, but compared to JD and Taobao, the Amazon website design is so out of date. It's a lot more difficult to categorize and filter items by brand and sellers.

[guilhermetavares]

Amazon here in Brazil had the fastest delivery when it arrived. Today Mercado Livre/Mercado Libre is much better because it has its own fleet, while Amazon needs third party companies for logistics. Shopee is also growing.

[台湾省共青团]

as a buyer who has bought things on Amazon in China, i cant believe i cant talk to seller directly in 21 century

[marcrennen]

CNBC is talking around the bush here, the core issue is simply due to the lack of trust in letting Chinese local to lead the Chinese headquarter. They still believe the American management who just get used to the traffic of Beijing in one month could understand the local market very well. The kindle was and is still a small niche market, the failure was destined regardless.

[misterhill]

The competition in China is intense.
The competition in USA is very light and weak, hence these companies thrived.
When these companies went to China, they assumed the Chinese and American markets are the same. They could not be more ignorant.
China already have similar products in China prior to these companies expanding into China.
They are not used to competition.
Of course they will be out competed.
These American companies also didn't trust nor listen to the local management team in China.
No wonder these companies will be like balloons pushing hard onto needles.

Room temporature IQ, ignorant, and agorrance were the reasons

[henrygutetama]

I recall Taobao was already huge in China around 2008 before Amazon even came into a online shopping thing in the US.

[SpiritsBB]

I'm pretty sure protectionism is key here - and I don't mean the Chinese government. I meant the US government had been protecting Amazon, thus alibaba/taobao have not had a chance to eat into Amazon's market shares in North America.

[foolz]

Amazon tried to issue command top down and not letting local talents to run freely. So…

[CloneCoalition]

Why need Amazon when they have Taobao? Almost everything they could ever find and way, way cheaper

[yulei]

Difficult to refound or replace when products aren't right. Also price is not as competitive considering the service isn't as good as what they have in the UK for example. But still I see it as an alternative when some of the product aren't available in TMALL OR JD

[fraternoe]

I tried to deliver an item off of Amazon to China that was $13 and the shipping fee was $36. It’s cheaper to have it sent to my house and send it out.

[Cyan_Nightingale]

Ease of payment (i.e. can pay with local banks without the use of credit card) & availability of Amazon is almost non-existent compared to Shopee, Tokopedia, or Aliexpress for example.