Amazon plans to shut down its e-commerce business in China

Amazon has confirmed that it plans to shut down its online store in China that allows customers to buy from Chinese merchants as it downsizes its operations in the country, according to a BBC report.

Amazon said it is informing sellers that it will no longer operate a marketplace from July, but Chinese consumers will still be able to order products from Amazon’s global store.

The firms cloud business unit that sells data storage and computing power to enterprises, will also continue to operate in the country.

The store’s closure comes as the company faces competition from domestic rivals Alibaba and JD.com.

Marketplace

Reuters first reported Amazon’s plans to end its domestic marketplace in China by mid-July to concentrate on more lucrative businesses selling overseas good and cloud services.

“We are working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible,” a spokeswoman familiar with the company’s plans said in a statement to Reuters.

According to a Bloomberg report, customers accessing Amazon’s Chinese web portal, Amazon.cn, after July 18, will only be able to view a selection of goods from its global store, rather than products from third-party sellers.

Domestic rivals

Amazon entered the Chinese market with the $75m (£57.4m) acquisition of Joyo.com, a Chinese books, music and video retailer, in 2004. Amazon rebranded the company as Amazon.cn in 2007.

However, it struggled to compete with local rivals JD.com and Alibaba’s Tmall marketplace in China.

India’s online retail market

The shift away from the world’s second-largest economy comes as the company continues to invest in India’s online retail market.

Amazon has committed to spending $5.5bn (4.2bn)  on e-commerce in India, where it is competing with local rivals Flipkart.

In 2018, Amazon launched a Hindi version of its mobile website and app for Android smartphones in a bid to attract new customers in India.

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