Disclaimer. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. But the ratio of Amazon’s to Alibaba’s advertising revenues flipped from 0.6x in 2016 to 1.1x in 2018. If Amazon carves out a successful niche, there’s plenty of money to be made in China’s thriving ecommerce market. Users logging onto Amazon's Chinese site after July 18 will see products sold from its global store, the company said. Amazon initially entered China in 2004 by acquiring the online bookstore Joyo.com for $75 million and rebranding it as Amazon China. Most stock quote data provided by BATS. In terms of profits, however, Amazon's Chinese equivalent is … Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. Singles Day, Alibaba's annual online spending blitz, regularly racks up bigger sales than Black Friday and Cyber Monday combined. To see the potential consequences, we should study the differences between Alibaba's Taobao and JD.com. Alibaba never takes possession of the products sold on Taobao, and the deliveries are all handled by a third-party logistics service. Amazon China and Amazon overseas purchases and sales grew by almost 300% over last year, and the number of newly registered Prime users grew 60% over last year’s “Black Friday.” China online retail market overview Q1 2017 Joyo was rebranded to Amazon China in … "That leaves Amazon in a position where it has to spend a lot of money to acquire customers while also competing aggressively with multiple strong players on price.". Joyo was rebranded as Amazon China in 2011. Motivated by low prices and convenience, Chinese buyers have fully embraced online shopping in a country where Alibaba, Amazon, JD, and Zalando are the big players.Yet the focus is often on the world’s two largest e-tailers, Alibaba and Amazon. Chinese rivals JD.com and Alibaba controlled 82% of the market last year, leaving little room for the US e-commerce giant. "After disappointing results in China, Amazon – led by its founder/CEO Jeff Bezos – has been determined to win in India," say report authors Mark May and Hao Yan. Amazon … It will also continue to sell its Kindle e-readers and content in the country. Taobao is a third-party marketplace that connects merchants to buyers. BEIJING—Amazon.com Inc. is checking out of China’s fiercely competitive domestic e-commerce market. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. Amazon will close its domestic e-commerce marketplace business in China, effective from July 18. Unfortunately, this strategy could also backfire by alienating shoppers and merchants. Coming in at $296 billion for the 12 months ended March 31, Amazon's revenue is more than four times as high as Alibaba's. The e-commerce market is growing globally, but in China, the expansion is even more remarkable. Amazon's platform competes for Chinese sellers with Tmall, owned by the country's e-commerce leader Alibaba (BABA). The Case of Amazon in China Amazon entered the Chinese market in 2004, when it acquired online book retailer Jojo. Amazon's merchants also struggled to compete against cheaper products from China, and many of Amazon's own private-label products come from Chinese merchants. The exit marked an end of the company’s 15 years of journey into the China market for their rigid localization in business strategy … Its eCommerce net sales are generated almost entirely in Greater China. Amazon doesn't require its third-party sellers to disclose their real-world locations or label the origins of their products. How did Amazon lose its way in China? After more than 15 years of trying, Amazon has secured less than 1% of the e-commerce market in a country of … Amazon's market share in China has fallen from about 15 percent a decade ago to about 6 percent. Amazon has also yet to turn a profit in Australia, where it launched in 2017, and has made no attempt to launch in most Southeast Asian countries, where … Amazon's growing dependence on Chinese sellers makes it look more like Taobao than JD, which ironically based its business model on Amazon's first-party platform. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. That business model is more capital-intensive than Alibaba's, but it kept JD off the trade blacklist. What happens when Amazon comes for your business? Returns as of 12/12/2020. Amazon is using AI in almost everything it does. Last year, however, Amazon China’s market share has plummeted to 0.6 percent, according to a research intelligence firm Analysys International. All rights reserved. I don't plan to sell my shares of Amazon anytime soon, but I'm keeping a close eye on its troublesome third-party marketplace and its opaque product listings -- which could push shoppers toward Walmart and Target's e-commerce ecosystems instead. JD is China's leading supermarket operator. Amazon's (NASDAQ:AMZN) aggressive push to court Chinese merchants could be flooding its U.S. marketplace with low-quality goods, according to the Wall Street Journal. WHAT’S IN THIS REPORT? Follow him on Twitter for more updates! The number of top Amazon.com sellers based in China has surpassed US sellers. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. 49% of the top Amazon.com sellers are based in China, and only 47% are US-based, according to Marketplace Pulse analysis of the top sellers whose business addresses can be reliably determined. The firm also claims that out of 1,934 merchants whose addresses could not be determined, 54% actually came from China. Amazon entered China in 2004 after it bought out local book-selling business Joyo for $75 million. That move significantly boosted sales of third-party products, which account for over half of its physical gross merchandise sales, but customer complaints about counterfeit and low-quality products soon followed. Amazon China never gained much traction against Alibaba (NYSE:BABA) or JD.com (NASDAQ:JD) in the Chinese market, so the company shuttered the platform earlier this year. Amazon entered the Chinese market with the acquisition of Joyo (2004), the firm was the largest online bookseller and was acquired for $75 million. Amazon raises minimum wage to $15 an hour, China will overtake the US as the world's biggest retail market this year, Robot waiters and snail pizza: What US fast food brands do to please Chinese diners. The market size of China's cloud computing industry is huge, but the segment is still in its infancy, said Gu Fan, general manager of product management at AWS China. As seen previously, Amazon Kindle is ranked in the top 5 of western brands on Alibaba’s Tmall. It's still tough for Alibaba to get rid of counterfeit and low-quality products on Taobao, and that lack of progress caused the platform to be placed on the U.S. Trade Representative's latest blacklist of "notorious" platforms. The company will keep running other business sections in China, including Amazon Web Services, Kindle e-books, and cross-border operations. The company then rebranded as Amazon China in 2011. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Alibaba and another local company, jd.com, account for nearly 75 percent of the Chinese market. In 2015, Amazon decided to join forces with Alibaba, and started doing business through the Chinese platform’s “Tmall” website. Amazon China has less than 1 percent of the market, according to iResearch Global Inc., and eBay China is not even on the map. Can Amazon afford to get into the ad business? "Over the past few years, we have been evolving our China online retail business to increasingly emphasize cross-border sales, and in return we've seen very strong response from Chinese customers," Amazon said. Most of the largest e-commerce markets in the world have Amazon and eBay with major market share, but not in China. "We are notifying sellers we will no longer operate a marketplace on Amazon.cn, and we will no longer be providing seller services on Amazon.cn effective July 18," the company said in a statement. While the ecommerce giant got a relatively early start in China, launching there in 2004, it failed to adapt to the native ecommerce culture and finally bowed out in 2019 after struggling for many years against local rivals like Alibaba and JD.com. According to iResearch China, Amazon's market share was less than 1% when they decided to shut down as Amazon China. "With the domestic market locked up by Alibaba and JD.com (combined they control 75% of the ecommerce market in China), it makes sense for Amazon to … JD sells groceries both online and offline in China and is … "Amazon's commitment to China remains strong. All times are ET. Market data powered by FactSet and Web Financial Group. Market Share of Amazon Sellers Based in China on EU-5 Sites, by Country, May 2018 & May 2019 (% of total on each country's site) Description This chart shows the share of Amazon sellers (including Marketplaces) based in China in the EU-5 countries' sites (UK, France, Germany, Italy, Spain) comparing May 2018 and May 2019. JD's core business is a first-party marketplace that takes on inventories and fulfills orders with its own logistics service, which makes it much tougher for counterfeit products to slip through the cracks. If Amazon continues down this path, it could tarnish its own brand and reputation. @themotleyfool #stocks $AMZN $WMT $TGT $JD $BABA, Amazon Says It Is Now the No. Amazon's platform competes for Chinese sellers with Tmall, owned by the country's e-commerce leader, "There is too much domestic competition and Amazon lacks the kind of brand awareness that Tmall or JD.com have," said Ben Cavender, an analyst at China Market Research Group. 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