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Authors: Jyothi R Javalgi
Published by: Amity Research Centers
Published in: 2019

Abstract

Amazon.com Inc (Amazon) had announced that it was shutting down its domestic marketplace in China to focus on the lucrative cross-border trade of selling goods shipped from other countries into China. The retail retreat had come amidst fierce local competition from incumbent titans Alibaba and JD.com. Unable to gain traction in the world's largest retail market, Amazon was withdrawing its operations from the Chinese e-Commerce marketplace by mid of July 2019. With the withdrawal, Amazon users in China would no longer be able to buy products from Chinese merchants, but would still be allowed to purchase goods from Amazons global store. However, the company would continue to operate its Kindle device business, cross-border e-Commerce and cloud computing services in China. Although Amazon had introduced most of the services it had in the US market, the company held a minuscule share of less than 1% in the China e-Commerce market. Nevertheless, it was witnessing a good response for premium, authentic goods from around the world. With Amazon working to shift its Chinese customers and sellers to its Amazon Global Store, it remained to be seen if the growing emphasis on cross-border trade made strategic sense. Against this backdrop, would Amazon's closure of online business enable the company to plug the revenue deficit in China? Can Amazon's cross-border business continue to grow and turn the tables for the global behemoth?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Time period

The events covered by this case took place in 2019.

Geographical setting

Region:
Asia
Country:
China

Featured company

Amazon China
Employees:
5001-10000
Industry:
e-Commerce

About

Abstract

Amazon.com Inc (Amazon) had announced that it was shutting down its domestic marketplace in China to focus on the lucrative cross-border trade of selling goods shipped from other countries into China. The retail retreat had come amidst fierce local competition from incumbent titans Alibaba and JD.com. Unable to gain traction in the world's largest retail market, Amazon was withdrawing its operations from the Chinese e-Commerce marketplace by mid of July 2019. With the withdrawal, Amazon users in China would no longer be able to buy products from Chinese merchants, but would still be allowed to purchase goods from Amazons global store. However, the company would continue to operate its Kindle device business, cross-border e-Commerce and cloud computing services in China. Although Amazon had introduced most of the services it had in the US market, the company held a minuscule share of less than 1% in the China e-Commerce market. Nevertheless, it was witnessing a good response for premium, authentic goods from around the world. With Amazon working to shift its Chinese customers and sellers to its Amazon Global Store, it remained to be seen if the growing emphasis on cross-border trade made strategic sense. Against this backdrop, would Amazon's closure of online business enable the company to plug the revenue deficit in China? Can Amazon's cross-border business continue to grow and turn the tables for the global behemoth?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2019.

Geographical setting

Region:
Asia
Country:
China

Featured company

Amazon China
Employees:
5001-10000
Industry:
e-Commerce

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