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Amazon Failed in China 2019

Chinese consumers say Amazon failed in China because it did not adapt to the local market over its 15 years operating there. Specifically, Amazon's website design was not appealing to Chinese customers, who prefer the more cluttered layouts of sites like Taobao and JD.com. Additionally, Amazon had difficulty customizing its user interface for China and implementing changes quickly. As a result, Amazon is shutting down its China marketplace and pivoting to selling foreign goods to Chinese consumers through other means. Many attribute Amazon's failure to adapt to local preferences and be nimble like Alibaba and JD.com, the dominant ecommerce players in China.

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232 views3 pages

Amazon Failed in China 2019

Chinese consumers say Amazon failed in China because it did not adapt to the local market over its 15 years operating there. Specifically, Amazon's website design was not appealing to Chinese customers, who prefer the more cluttered layouts of sites like Taobao and JD.com. Additionally, Amazon had difficulty customizing its user interface for China and implementing changes quickly. As a result, Amazon is shutting down its China marketplace and pivoting to selling foreign goods to Chinese consumers through other means. Many attribute Amazon's failure to adapt to local preferences and be nimble like Alibaba and JD.com, the dominant ecommerce players in China.

Uploaded by

Hady Eldewik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Consumers

say Amazon failed in China


because it didn't ADAPT
Chinese consumers said Amazon couldn’t compete with
local ecommerce behemoths Alibaba and JD

When Amazon announced it would stop operating its China marketplace starting July
18th, 2019. Chinese consumers hardly seemed disappointed. Amazon deserves to be
pushed out, they said, because of its inability to adapt in their country.

Once its store is closed, Amazon shoppers in China will no longer be able to buy goods
from third-party merchants in the country. Instead, they will only be able to order
products from Amazon’s global store.

The announcement doesn’t mean one of the world’s most valuable companies is
completely withdrawing from China, though. The company intends to focus more on
selling overseas goods and cloud services in the country.

However, since Amazon now has about 2,000 employees in China, pulling the plug
on its China marketplace will likely incur layoffs, according to the China Business
Journal. Amazon China president Elaine Chang is also reportedly leaving.

The move doesn’t seem to be a complete surprise in China. Chinese netizens


said they expected Amazon to shut down its Chinese marketplace because it failed to
adapt to local tastes, which it had 15 years to do.

“No kidding. Amazon came into China with guns blazing, but it didn’t try hard
enough,” a Chinese netizen wrote. “It failed to adapt to the local market and the
preferences of Chinese consumers. Who is going to buy from them?”

The most common example of Amazon’s failure to adapt is the company's website
design. It turns out Chinese consumers don’t care for the relatively clean web design
Amazon deploys on all its sites. In China, ecommerce sites like Taobao
and JD.com are much more cluttered, cramming more goods onto a single screen.
Amazon China’s front page has a much cleaner design but it doesn’t really appeal to Chinese consumers.

“Amazon’s UI is as s**t as Newegg’s,” someone wrote in a popular comment. “The


moment I see it, I lose all desire to make a purchase.”

In fact, Amazon’s Chinese employees are also aware of how the site’s user interface
has little appeal in China. “American companies want to stick with just one UI style
across the globe,” an unnamed source told China Business Journal. “But that makes
customizing the Chinese webpage very difficult.”

Amazon’s Chinese site has already seen a lot of changes, according to the employee,
but getting those changes done was difficult and took a long time.

That’s unlike China’s other 996 ecommerce companies,” the person said. “In those
companies, as soon as the boss requests a new feature, the staff burns the midnight
oil until it’s launched.”

Amazon isn’t the first US ecommerce company to fail to adapt to China. Online auction
king eBay, which was the first major ecommerce firm in China, failed for a similar
reason 13 years ago.

Many attributed eBay’s downfall in China to its reluctance to change at a time


when Alibaba was proving more adept at providing a shopping experience better
suited to Chinese consumers.

Today, Chinese ecommerce companies dominate the domestic market, with Alibaba
and JD.com taking up more than 81% of it.

(Abacus is a unit of the South China Morning Post, which is owned by Alibaba.)
As shown country flags featured on the front page, Amazon China has already pivoted to selling foreign goods.

While many blame Amazon’s obstinance for its failure in China, some consumers
sympathize with the Seattle-based company. They note the many challenges that
Amazon faces in the country, including endless price wars that eat into profits and the
constant battle against knockoffs. Although it is common to see Western tech
companies struggle in China because of cultural differences, Chinese consumers
don’t blindly prefer local brands.

In fact, a recent poll showed that more than 85 percent of internet users in Chinawould
choose Google over local search engine Baidu should Google make a comeback to
the country. Another case in point is Valve’s Steam. The digital game store from the
US has 30 million users in China. Gamers’ affection for Steam dwarfs what they feel
for homegrown services such as Tencent’s WeGame and Perfect World’s Steam
China.

So maybe there is still a chance for Amazon. The company’s statement said,
“Amazon’s commitment to China remains strong. We will continue to invest and grow
in China across Amazon Global Store, Global Selling, AWS, Kindle devices and
content.” If Amazon carves out a successful niche, there’s plenty of money to be made
in China’s thriving ecommerce market.

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