Amazon Is Leaving China after 15 Years in the Country

e-Commerce giant Amazon (AMZN) will retreat from its domestic marketplace business in China as of July 18.

Sanmit Amin - Author

Apr. 24 2019, Published 11:24 a.m. ET

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Amazon wasn’t able to make any inroads in China

e-Commerce giant Amazon (AMZN) will retreat from its domestic marketplace business in China as of July 18, as it faces stiff competition from local e-commerce giants, including Alibaba (BABA), (JD), and the fast-growing Pinduoduo.

Alibaba has a stranglehold on the Chinese e-commerce market. According to eMarketer, Alibaba had a 58.2% share in the Chinese e-commerce market last year, while cornered 16.3% and Pinduoduo owned a 5.2% share. Meanwhile, Amazon China had only a 0.7% market share.

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The e-commerce giant was forced to leave China as the scope for growth in the country had evaporated not only due to growing competition but also due to the slowing Chinese e-commerce market.

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Amazon Web Services and Kindle will be available in China

Amazon entered the country 15 years ago by acquiring e-commerce company for $75 million.

Users in the country won’t be able to buy goods from domestic vendors on Amazon’s platform, but they’ll still be able to buy some products from Amazon’s global store.

Amazon Web Services, Amazon’s cloud computing division, will continue to operate in China. Amazon’s Kindle e-book service will also remain in operation.

While Amazon’s profits have been growing quickly in recent quarters, it’s still in the red internationally. The company’s operating profit outside North America was $2.1 billion in 2018.


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