Amazon said it will no longer operate in China or provide seller services on its Chinese website, effective July 18, Reuters reports. However, the company is still expanding in other countries, especially India, where it is rivaling local ecommerce giant Flipkart.
A company spokesperson said in a statement that Amazon is ‘working closely’ with sellers to ensure a smooth transition and maintain the ‘best customer experience possible’. “Sellers interested in continuing to sell on Amazon outside of China are able to do so through Amazon Global Selling,” he said
Amazon shoppers in China will no longer be able to purchase good from third-party merchants in the country. However, they will be able to place orders from the United States, Britain, Germany, and Japan through the firm’s global store. According to Ker Zheng, marketing specialist at Shenzhen-based e-commerce consultancy Azoya, the move might not provide a competitive advantage for the company because its Chinese customers have no reason to come back unless they are looking for a very specific product with limited availability. In addition, the company will not be able to ship items as fast as Tmall or JD, he added.
Michael Pachter, a Research Analyst at Wedbush Securities, said Amazon is pulling out because it is neither seeing profits nor growing. However, the company will continue its presence in China through Amazon Global Store, Global Selling, Kindle ereaders and online content.