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Amazon Plans to Close its Domestic Marketplace in China by Mid-July

Amazon shoppers in China will no longer be able to buy goods from third-party merchants in the country, but they still will be able to order from the United States, Britain, Denmark and Japan via the firm’s global store

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Prior to asking for selfies, the company notified drivers of the new requirement via the Flex app that their biometric data might be collected to confirm their identity from time to time. VOA

Amazon.com Inc. plans to close its domestic marketplace in China by mid-July, people familiar with the matter told Reuters, focusing efforts on more lucrative businesses selling overseas goods and cloud services in the world’s most populous nation.

Amazon shoppers in China will no longer be able to buy goods from third-party merchants in the country, but they still will be able to order from the United States, Britain, Denmark and Japan via the firm’s global store. Amazon expects to close fulfillment centers and wind down support for domestic-selling merchants in China in the next 90 days, one of the people said.

Home-grown e-commerce

The move underscores how entrenched, home-grown e-commerce rivals have made it difficult for Amazon’s marketplace to gain a foothold. Consumer insights firm iResearch Global said Alibaba Group Holding Ltd’s Tmall marketplace and JD.com Inc. controlled 81.9 percent of the Chinese market last year.

“They’re pulling out because it’s not profitable and not growing,” said analyst Michael Pachter at Wedbush Securities. Ker Zheng, marketing specialist at Shenzhen-based e-commerce consultancy Azoya, said Amazon had no major competitive advantage in China over its domestic rivals.

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FILE – A logo of JD.com is seen on a helmet of a delivery man in Beijing, June 16, 2014. VOA

Unless someone is searching for a very specific imported good that can’t be found elsewhere, “there’s no reason for a consumer to pick Amazon because they’re not going to be able to ship things as fast as Tmall or JD,” he said.

Amazon’s customers in China will still be able to purchase the firm’s Kindle e-readers and online content, said the sources, who spoke on condition of anonymity. Amazon Web Services, the company’s cloud computing unit that sells data storage and computing power to enterprises, will remain as well.

The U.S.-listed shares of Alibaba and JD.com rose 1% Wednesday after Reuters first reported the move, before paring gains later in the day. Amazon’s shares closed flat.

US retreat, e-commerce showdown

The withdrawal of the world’s largest online retailer — founded by the world’s richest person — comes amid a broader e-commerce slowdown in China. Alibaba in January reported its lowest quarterly earnings growth since 2016, while JD.com is responding to the changing business environment with staff cuts.

 

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FILE – A worker removes an advertisement billboard of Indian online marketplace Flipkart, installed along the roadside in Mumbai, India, Oct. 16, 2015. Amazon.com Inc. is concentrating on India and its competition, Flipkart. VOA

It also follows the Chinese e-commerce retreat of other big-name Western retailers. Wal-Mart Stores Inc. sold its Chinese online shopping platform to JD.com in 2016 in return for a stake in JD.com to focus on its bricks-and-mortar stores.

Similarly, the country appears to factor less in the global aspirations of fellow U.S. tech majors Netflix Inc., Facebook Inc. and Alphabet Inc.’s Google, Pachter said.

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Amazon bought Chinese online shopping website Joyo.com in 2004 for $75 million, rebranding the business in 2011 as Amazon China. But in a sign of Tmall’s dominance, Amazon nevertheless opened an online store on the Alibaba site in 2015.

The firm is still expanding aggressively in other countries, notably India, where it is contending with local rival Flipkart. (VOA)

Next Story

Amazon Employees Risk Their Jobs by Criticizing Amazon’s Record on Climate Change

Workers Criticize Amazon on Climate Despite Risk to Jobs

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Employees walk through a lobby at Amazon's headquarters in Seattle. VOA

Hundreds of employees are openly criticizing Amazon’s record on climate change despite what they say is a company policy that puts their jobs at risk for speaking out.

On Sunday, more than 300 employees of the online retail giant signed their names and job titles to statements on blog post on Medium. The online protest was organized by a group called Amazon Employees For Climate Justice, an advocacy group founded by Amazon workers that earlier this month said the company had sent letters to its members threatening to fire them if they continued to speak to the press.

“It’s our moral responsibility to speak up, and the changes to the communications policy are censoring us from exercising that responsibility,” said Sarah Tracy, a software development engineer at Amazon, in a statement.

Amazon employees at the company logistics centre in Boves
The logo of Amazon is seen at the company logistics centre in Boves, France. VOA

Amazon said that its policy on external communications is not new and is in keeping with other large companies. It said the policy applies to all Amazon employees and is not directed at any specific group.

“While all employees are welcome to engage constructively with any of the many teams inside the company that work on sustainability and other topics, we do enforce our external communications policy and will not allow employees to publicly disparage or misrepresent the company or the hard work of their colleagues who are developing solutions to these hard problems,” according to a spokesperson from the company.

Amazon, which relies on fossil fuels to power the planes, trucks and vans that ship packages all over the world, has an enormous carbon footprint. And its workers have been vocal in criticizing some of the company’s practices.

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Last year, more than 8,000 staffers signed an open letter to CEO and founder Jeff Bezos demanding that it cut its carbon emissions, end its use of fossil fuels and stop its work with oil companies that use Amazon’s technology to locate fossil fuel deposits.

The company said in a statement that it is passionate about climate change issues and has already pledged to become net zero carbon by 2040 and use 100% renewable energy by 2030. (VOA)