Amazon Will Shut Down Chinese Marketplace But Continue Cross-Border Operations

Although it has been operating in the country since 2004, Amazon plans to shut down its Chinese marketplace business in July. The retail giant is shifting its focus to offering mainland Chinese consumers overseas products rather than goods from local sellers. Amazon’s move represents a harsh reality for U.S. retail businesses, revealing just how difficult it can be for retailers — even those with seemingly unlimited resources — to succeed in China, especially against local competition.

Starting on July 18, customers logging in to Amazon’s Chinese web site, Amazon.cn, will only see a selection of goods from its global store rather than products from third-party sellers.Amazon will keep running its other businesses in China, including AWS, Kindle E-books and cross-border operations that help ship goods from Chinese merchants to customers abroad. The cross-border focus appears to be more in line with consumer trends in the area: nearly 24% of China’s digital shoppers will make a cross-border purchase this year, according to eMarketer.

Amazon launched Prime in China in 2016 with promises of high-quality Western goods and perks including free international deliveries. Prime Video, which has been used to attract customers in other markets, isn’t available to users in China.

The most likely reason…