Why Amazon's Marketplace Failed In China
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- čas přidán 30. 01. 2023
- Amazon entered the China market in 2004 through a $75 million acquisition of Joyo.com, an online media seller. During its time in the country, substantial competition from local e-commerce giants such as Jack Ma's Alibaba, TaoBao and JD.com hindered its ability to capture a wider breadth of market share.
Amazon later pushed heavily on its e-reader and tablet product offerings, but China's complex regulatory approval caused years-long delays. Between 2011 and 2012, Amazon's held a market share of around 15% in the country but later plunged to less than 1% by 2019, according to iResearch. Amazon officially closed its China marketplace in 2019 but keeps, among other businesses, its Amazon Web Services, Amazon Global Logistics and Amazon Advertising.
Chapters:
1:48 Ch. 1 - Amazon's early efforts in China
3:57 Ch. 2 - Why it failed
9:01 Ch. 3 - Ongoing efforts in China - and beyond
Produced by: Jade Tungul
Senior Managing Producer: Tala Hadavi
Graphics by: Mallory Brangan, Jade Tungul
Additional Sources: Amazon, Securities and Exchange Commission, Alibaba Group, JD.com, Reuters
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Why Amazon's Marketplace Failed In China
Wait, you think that reason of Amazon's fall is due to Chinese regulation on Kindle ? It is ridiculous. Kindle is just a such tiny tiny product in the whole e-commerce market.
They have to mention Chinese regulation somehow and try to blame it on them because they themselves heavily regulate or even straight up ban Chinese companies going global.
@@MGZetta Ovarall, I think western medias offer more information on both sides than chinese medias. That is why I watch BBC and DW. But they are also heavily biased too and they take sides before making any reports. Nowadays, professional medias have low credit but they are still important sources of information. Just take their reports with tons of salt.
@@VechoBryant Go watch South China Morning Post, much better than western brainwashing machines even though it leans towards to west. Not a single western media shows the Chinese side. If you want an unbiased conclusion, watch the media of both sides and draw your own conclusion. Although a non-biased person doesn't just watch BBC and says it's fair. Lol. It's even more pathetic when the west straight-up ban opposing media making it impossible to have an unbiased conclusion.
If you wanna dig deeper look at their past reports and agendas then compare them to the result. For example, do you know how much BBC said Sadam Husain had WMD? Yeah. Makes it harder to believe whatever they say the more you discover their lies.
@@MGZetta Thanks for the recommendation. I definitly would watch SCMP. You are right that we should watch both sides for information and draw our own conlcusion.
@@VechoBryant iPhone also runs it's business under the same regulation. Does that remind you of something.
It has nothing to do with kindle. Amazon just can’t catch up with the rapid growth of the market. The shopping experience is terrible and takes years to make any change while others are evolving almost every week.
Amazon also experienced the same thing in south east asia. Perhaps even worse. Amazon had the whole of SEA to itself for nearly 15 years. However it did not pay attention to its customers. Nor did it even try to make the experience seamless. Selection was limited and it as very hard to buy things online. Everything, even stuff from China or a country next door seems to have to go to the US before coming back, making the shipping cost impossibly high. Sure it got better over time... slowly. But when native online stores emerged, they quickly drove out Amazon.
YES
Shopee and Lazada dominate the SEA market btw.
Both are Singaporean companies.
(Lazada is owned by Alibaba tho)
I lived in Taiwan where Amazon still exists and I have to say... It's not good. The same issue with few product selections exist. Even shopee the next competitor, a Singaporean e-commerce is better than it. A few times, I ended up just buying from Chinese alibaba/taobao and jd to ship to Taiwan because it was just better selections.
@@GraniteInTheFace and cheaper too.
I am a Southeast Asian and my favorite is Shopee.
Price is great and delivery is super-fast.
亚马逊很难用，页面设计不友好，产品少，物流差。电商本地化不行只能淘汰
from my experience in china. i feel like they don't need other choices bc they have much better options.
On any Chinese shopping app, I click into an item and scroll down, there’s going to be lots of full width images showing every detail. I click into an Amazon item, there’s only a tiny image on the left side of the screen, if I try to click on it that opens another window, and the image is STILL NOT FULL WIDTH. I mean what is Amazons problem with showing me the freaking product in more detail?
That's true. Taobao even encourages their shoppers to make reviews of their products with photos and videos.
why do you need picture? i think Amazon its quite modern looking and has UI that is well thought...not sure what you are used to
@@havencat9337 to see what I'm buying?
@@havencat9337 Amazon can not match the extensive customer service taobao has, see h buy a gadget and dunno how to use, no way u could talk to someone from seller’s team for detail
@@havencat9337 if one never experienced the good stuff then one never know to want it
In such a competitive sector in China which combines retail and internet technology, Amazon doomed to fail when it had to make all major decisions at its HQ in Seattle.
they were literally 13-ish hours behind when making decisions
While I do appreciate the fact that Amazon hadn't squish a million side services (video streaming, cash back, financial services, mini games) onto their website, but compared to JD and Taobao, the Amazon website design is so out of date. It's a lot more difficult to categorize and filter items by brand and sellers.
I havent tried JD or taobao but amazon's website is crap compared to newegg or even walmart or target. I suspect they make it difficult so they can promote thier amazonbasics, amazon choice, and paid promotion products
Even compared to Shopee or Lazada, I find Amazon's site so outdated.
as a buyer who has bought things on Amazon in China, i cant believe i cant talk to seller directly in 21 century
I think this piece got the most right. Amazon didn't have a strategy for China, they thought the same strategy made them successful in US can win in China. The other side of the same coin, they were out competed on every aspect of eCommerce, convenience, speed and etc. They haphazardly went to China and had a heavy dose of hyper-competition in China.
Not to mention that darn near everything is produced there nowadays and their shipping costs are dirt cheap compared to the US and UK.
@@bizminded555 I think this is Amazon didn't have a China strategy. The population density in China in urban area is much higher. Delivers can happen multiples time a day and still be profitable. JD took this advantage and did same day delivery long time ago. And Amazon didn't. Where products are made played minor role here, it's more about the time it takes from their warehouse to consumer. JD and Amazon are selling the same product after all.
@@yuzhang2755 I can agree. Amazon didn’t do their research like most American companies that go to China and try to win the publics favor with no clue on how to do it. Yup
Alibaba: Hey Buddy🇨🇳 Please hold my TSINGTAO Beer🍺🍻
I'm pretty sure protectionism is key here - and I don't mean the Chinese government. I meant the US government had been protecting Amazon, thus alibaba/taobao have not had a chance to eat into Amazon's market shares in North America.
If Chinese e-commerce could freely roam the US market, Amazon would be dead in a year. You simply cannot move at the pace a Chinese company operates, the employees will outwork you in three categories: hours, speed, and delivery , thus having a competitive price advantage.
@@waynez5535 Taobao doesn't even need the speed factor. They can already destroy Amazon even if delivery is 3-4 days. Imagine if 100,000 best selling goods from China gets distributed throughout the US warehouses, delivered by Taobao, selling at half the price as Amazon. Bye bye amazon.
@@waynez5535I mean, Temu is already here and is reasonably fast given it's still shipping overseas and prices r cheap af too. Tho if u want higher quality products, u'll have to pay way more, like any other website.
Amazon is basically an e-commerce monopoly in the US and perhaps the rest of the world. Whereas in China, the e-commerce industry is very competitive, as seen in the pie chart @.4:36. So if you ask which country, China or the US, does capitalism better, i would have to say China in this regard.
Amazon here in Brazil had the fastest delivery when it arrived. Today Mercado Livre/Mercado Libre is much better because it has its own fleet, while Amazon needs third party companies for logistics. Shopee is also growing.
even Amazon cannot penetrate South East Asia countries too because of Shopee which is also under Jack Ma
Shopee has nothing to do with Jack Ma. Why do you comment without knowing the facts first? Jack Ma founded and has a stake in Alibaba which owns Lazada which competes with Shopee.
It is Lazada, not Shopee.
Shopee is owned by Singaporean company.
I recall Taobao was already huge in China around 2008 before Amazon even came into a online shopping thing in the US.
I call BS, my order history goes back to 1995 and I've been buying more than books since early 2000
it's just CCP protectionism and cronyism
Lies again? AMWF CHINESE
@@auroragb when did you start using amazon prime? when did amazon start to massively build warehouses? Any of friends employed by Amazon earlier than 2010? I wish your Amazon was as big as it is today back in 1995.
@@auroragb I DO pay for Prime membership as I use Amazon for everything everyday. I have 3 orders on the way right at this moment. I bet it different from what it was in 1995.
How can you provide a service that a nation already has?
CNBC is talking around the bush here, the core issue is simply due to the lack of trust in letting Chinese local to lead the Chinese headquarter. They still believe the American management who just get used to the traffic of Beijing in one month could understand the local market very well. The kindle was and is still a small niche market, the failure was destined regardless.
Difficult to refound or replace when products aren't right. Also price is not as competitive considering the service isn't as good as what they have in the UK for example. But still I see it as an alternative when some of the product aren't available in TMALL OR JD
As a chinese who used both JD and Amazon, I can only say that whenever I could buy from JD, I always enjoyed a lower price and much better services including faster shipping. Amazon give me a feeling that it just simply moved the same business model from north america to china without any local adjustment
Before amazons overhaul, it used to have superior customer service and only sold high quality things. They stood behind the products sold and took very good care of their customers in the US. Since the overhaul, Amazon is crap.
Which one is better, Alibaba or JD when it comes to online shopping on daily basis in China ❓
@@Booz2020 doesn't the answer to your question depend upon the individual citizen and the level they bend to the social credit score system?
@@1erinjames You tell Me as an average Murican 👀 Havent tried online shopping on Alibaba and JD though
@@1erinjames Keep your mouth closed if you base all your points on the biased western propaganda media. Go to China and find me a single example proving that there is such a 'social credit score' system. It does not even exist, we have social credit record system in China, which documents citizens' financial default records, and that affects how the bank decides whether give you the loan if you applied one. I think this is the same as most countries in the world, you keep good credit records and that make your life easier.
China’s mobile commerce is way ahead of the US. Just visit there you will understand, lol. WeChat is way ahead of any chat app in the US. It is weird that no such app even exist in the US or any other country……
yeah, but its censored. Evil Winnie the Pooh won't allow truth
Wechat may have more functions but when it comes to UI design and aesthetics, Line and Kakaotalk are a lot better.
Says a wuamo.
Indeed, Facebook are copying them, several years later
A lot of ppl only care about efficiency
Ease of payment (i.e. can pay with local banks without the use of credit card) & availability of Amazon is almost non-existent compared to Shopee, Tokopedia, or Aliexpress for example.
awful shopping experiences in Amazon just seems that they actively choose being blind to consumers but money profits are always their priority.
Some of amazons domestic market is also over seas orders (not China though)
Hear me out they deliver to an American address using American amazon website a third party carrier then picks up the products and ships them to the buyers country this is done in many countries that don’t have any other choice and that’s great business sad that the lower income company has to pay more and also import duties by their own countries which varies.
Amazon tried to issue command top down and not letting local talents to run freely. So…
Why need Amazon when they have Taobao? Almost everything they could ever find and way, way cheaper
the market share reference is wrong. It is Taobao plus Tmall together accounting for 53% market share.
I tried to deliver an item off of Amazon to China that was $13 and the shipping fee was $36. It’s cheaper to have it sent to my house and send it out.
Amazon came late to the party in China. Alibaba already monopolized the Chinese markets. Alibaba like Amazon is a monopoly and Amazon got a taste of its own medicine 😂
Seems like you didn't watch the video at all
The competition in China is intense.
The competition in USA is very light and weak, hence these companies thrived.
When these companies went to China, they assumed the Chinese and American markets are the same. They could not be more ignorant.
China already have similar products in China prior to these companies expanding into China.
They are not used to competition.
Of course they will be out competed.
These American companies also didn't trust nor listen to the local management team in China.
No wonder these companies will be like balloons pushing hard onto needles.
Room temporature IQ, ignorant, and agorrance were the reasons
Why Amazon's Marketplace Failed In China? *Because everything was made there?*
Not even half of consumer goods, but even so China exports consumer goods. But recall stuff has to get from one end of China to the other
Me buying cheaper WALMART products that made in China be like 🤔
BINGO. Amazon makes money on people buying crap from china and repackaging to be ‘premium’ then reselling it on Amazon where Amazon makes what ever percentage they do.
@user-qg2so3ik9j only if you have no idea what you're talking about. Do you even know who makes airplanes?
LPA33X gang in the house! Thanks for the analysis!
If I know Chinese people, doesn't matter if they have money. If they need something they will go out there and get it themselves, they dont like to pay subscriptions fees. My uncle drove 90 miles once because his friend told him it was raining in his area, he drove his car there just so he could get a free car wash from the rain. Also asked for three baskets of free bread from Cheesecake factory, just so he could ask for it to go later. Also bought a cow for large backyard so he never had to pay someone to cut his grass. and ocassionally got free milk from the cow.
no one likes subscriptions.
Apparently you are the person who does not know Chinese. All e-commerce platform offers paid membership services like Amazon . They started membership services on their social media network problems even before their American counterparts
With all due respect, a lot of CNBC videos on why/how something failed or succeeded are very shallow both in their research and their presentation. If you also ask how Jack Ma was treated then and how he is treated now, you can at least add one more aspect on how China as a government contributed to the faith of American businesses (such as Amazon and Uber) in China that were built on the Internet.
Your comment is even more shallow considering that there are more ecommerce entrepreneurs than just Jack Ma who is widely known outside mainly because he has better English skills. Most Chinese people despise Jack simply for being an egotistic maniac for creating a school only for rich people, trying to monopolize every industry, trying to create a highly unstable financial company with high leverage - Antpay which is suppose collaterize all loans at the expense of the banks instead of his own company, bad business practices within his own companies etc.
Well said, the money laundering white gloves for the Chinese government officials. CNBC didn’t even scratch the surface
Amazon is monopoly in US and become expensive. Hope there is another 2 or 3 other Amazon, then e-commerce will be price competitive: cheaper.
Nope, Amazon will but it up and close it down.
Only one reason: lacking localization. Also no one beat the Chinese regarding user experience.
User experience for Chinese consumer goods is a host of horror stories about bizarre cheap substitutions
Lots of misinformation here. Some counterpoints: 1. Amazon Kindle failed not because of regulations, but because it was over-priced in a market where mobile phones are dominant, and low cost e-readers are used for reading only. 2. When Amazon came into the market it did not have good localization of products, it took time for them to catch on. 3. Their small seller platform was Amazon branded while Chinese competitors allow great customization and branding. 4. They failed to effectively partner with local delivery companies, essential to getting reach beyond cities. What the story gets right: 5. Failure to localize. 6. Mindshare with locals, particularly the less-affluent. 7. Alipay & WeChat Pay dominate retail commerce at a level Americans can't imagine, Amazon did not have a cooperating system or good integration wth them, credit cards are seldom used in China.
In a few years time, there's going to be a 'Why Amazon failed in Australia' vid too.
Would you buy the stuff if you worked in the warehouse or the factory making it? Kind of a circle of life thing
Not quite. Chinese factories are highly specialized and often very specific industries are concentrated in certain cities. The fact is that's all for export, while the average Chinese citizen buys what they need from regional vendors.
Chinese companies really only buy into US brands if consumers want the prestige of the brand. And you must have 51% of your Chinese branch be owned by Chinese companies.
Amazon is also struggling in Brazil.
why? 0:05 these are some of the biggest and most recognizable brands in america who invested in making alibaba, taobao, and jd
China is not a tough market, it’s just that western brands especially Americans ones failed or didn’t try to localize their brand and offerings. KFC is an exception, it has been very well received by Chinese people, they offer more than just fried chicken and also congee and peking duck wrap
Have to agree
Companies that adapt to the nations culture tends to survive.
And the government!
@@tl1533 true too...
Each government system is different
Laws are different too.
@@tl1533 Not really the case with Amazon. Taobao (with ALIPAY that makes real difference, unlike poor westerners that are stuck with Paypal, credit cards and all that), JD and now PDD/Temu are just too formidable the opponents for Amazon's half assed effort in China.
Disagree. The level of competition in China is incredibly intense. US firms usually go in and come out with tails between their legs after realizing how intense it is.
Next episode: Why Huawei’s marketplace failed in US
It’s banned.
AliExpress and Alibaba is awesome
They've had massive layoffs and were a real circus even at their peak.
Amazon: we're here 🎊
China: nah we're good 👍🏾 👌🏾
Its the same thing with Microsoft trying to sell their Xbox game consoles to the Japanese market when they already have Sony's Playstation. Why use Amazon when you have Jack Ma's Alibaba/Taobao platform. Saved you 10mins of your life.
Apple dominates the Japan's phone market while they have Sony. (Apple sells 8 times more phones than Sony, they have 70% share in Japan's phone market)
@@JigilJigil That's a weak argument. Sony was NEVER known for their smartphones. Yeah they make some but I have never seen a person with Sony phone. Its almost always tvs, playstation, cameras.
@@kuvjason7236 Sony/Playstation dominates U.S market while they already have their own company/console, Microsoft/Xbox.
Hiw do you sell a product made in china cheaper than china already makes it would be the first question.
There is a reversal expected reason is that LPA33X is made by Amazon and pretty hot
Good.
Hmm, interesting
Not just in China, but most of Asia.
Here in the Philippines, all those US brands are unrecognizable now (unlike before).
Depending on who owns it
I never understood the appeal of Amazon. If I want a product I'll go to any website, I don't need to be to constrained to what ever Amazon's secession is.
China is the definition of time is money.
"Adapt or die" - Sun Tzu
Stability, usecase, utility. These are factors which should transform you into a buyer and not the idea of whatever it's gonna work. This sounds simple but apprently still too difficult to most. My idea is Amazons LPA33X, they provide all these values and more.
There also non of these companies mentioned here in other countries in Asia.. lol.. Why buy from them when we can buy directly from the same supplier ?
As a former amazon warehouse worker I love that amazon fails!
Doesn't help Chinese companies take advantage of US postal service to deliver pretty much free.
As for Amazon, it's pretty much Chinese goods anyway.
On Amazon it's expensive. For instance computer hardware is expensive in India at Amazon whereas in local shops it's much cheaper.
Where is jack Ma?
HK
@@user-gf1zd7hm1e ?
I wanna do a survey, who of you guys actually is fully aware on the strong announcement with Amazons LPA33X?
biggest market explosion ever is LPA33X
No Amazon in Korea and I hope there never is. Brick and mortar and shopping malls still healthy here.
Their always be competitors, as to say e-commerce come in one form or another in South Korea.
A WIN FOR AMERICA
Amazon lost because they turned down so many small sellers while couldn't attract the big local and international brands.
Alibaba , home of 40 thieves and 01 client . Paid in full and received a piece of fake , garbage product . Keep it up and you will win again .
Amazon did a poor job of localization. Whoever was in charge of their operations in China, Japan, south Asia should be fired.
Taobao has been dominating the market in China and the online store has even beat ebay
In China
Do you really think the Chinese would have allowed a foreign company to come in their back yard? Come on . . .
The amount of bot comment spam by just mentioning the A to Z company, holy..!
This is just insane...
Interesting that AWS are prominent in China, when they are working and provide services for the US Government. Its akin to a more extreme version of Tiktok presence in the US - but affecting organisations, not individuals
Interesting, somebody recently told me to get certified in AWS. I'm an unemployed engineering graduate who went to teach in China so I could afford to rent an apartment during the Great Financial Crisis
This innovation by Amazon is sick LPA33X
Tesla is not doing well in china because if their govt support of their local brand
Before even watching the video: protectionism.
亚马逊上面很多东西都是中国生产，但是价格比国内淘宝高出好多
What’s up with all these bots pushing crypto? Over half of these accounts are only 2 months old.
One conclusion: believe it or not, Amazon just isn’t big enough
Now is such an era, Americans complain about China if they are constipated
when you compete against the one that built your foundation lmao
China doesn't need amazon. Imagine if Ali Express had physical operation in the US?
Let’s see what will happen!
The party decides duh
Too many westerners as managers in a market that they either do not understand at all or have superficial understanding of. Some of those westerners came from outside of the US (Usually Australia, UK and the likes) which made it even worse cause they were neither from American HQ nor have any meaningful field knowledge of China. They were busy being lords and trying to look good with HQ. They could not or would not localize the operations. Amazon could have made a huge impact in China. Not just in ecommerce but in logistics as well as cloud with AWS.
can someone explain to me how globalization benefits the average American family? And I don't consider cheaper goods and service a benefit when it cost american jobs.
Is it true that globalization benefits the top 1% and widens the wealth gap?
Temu is coming .
After the Etherem ecosystem, LPA33X is the best ecosystem available on the market and most people don't understand this yet, I believe due to lack of marketing. Thank you so much for bringing us this kind of content!
iPhone has also to get that "infamously tricky regulatory approval" and it doesn't take years. Wake up and say something true
you know, there are 4.75 billion people on the Asian continent.
應該反過來問亞馬遜為什麼在美國能成功 為什麼水之道是居然北美票房冠軍？
Just bought and Still Holding LPA33X
All companies need to invest in other countries who most likely become consumers. Valuable time is loss in China. No need to invest in a country that has multiple e-commerce companies.
8:43 Look below the highlighted text!
PRC local regulations ensure amazon is run partially oflr wholly by PRC nationals...
It's called national security.
Amazon was defeated by regulations. If you ask why Apple survived that is because they currently don't have a product to replace iPhone after the Huawei downfall.
The regs only exist to collect bribes.
I think STARBUCKS & APPLE are the most successful American companies in China.
And other countries not just China.
Americans who have not enjoyed other foreign e-commerce services overseas, may not know how bad Amazon is.
Amazon is the most loved eCommerce brand here in Germany - it’s 2nd biggest market
My largest holding is Amazons LPA33X. Glad it came out to be this. I’m a fanboy and I like Charles. He reminds me of Steve Jobs when he speaks.
A lot of successful foreign brands in China are mostly food, McDonalds, KFC, etc. Think it's easier for them there, while tech companies struggle due to China's grip on making foreign tech and commerce companies a living hell to do business there.
Part of this is because the Chinese consumer thinks much more highly of US brands than Americans
McDonalds and KFC do lots of localization. They offer Chinese food and “Chinanize” their burgers and wraps. They do that in lots of foreign markets. Like you can get curry in McDonald’s in India. That’s how they’re successful.
@@samsonsoturian6013 Because some of US brands have better offerings in China than in US. For example Lays chips has lots more localized flavors (eg. hot pot flavor, lamb kabob flavor) and many seasonal flavors in China market. In US the selection is super limited.
@kekeshuoshuo there's dozens of flavors over here even if no one store has them all. Also, Chinese branches of US brands are as much involved in the fake food nonsense as everyone else. Again, it is all down to China having a higher opinion of US brands than Americans do. Good food is a cheap commodity in North America.
Cuz none of these guys are making cutting edge tech. Their tech and business model can be easily replicated and improved upon. If you want to survive in Chinese market, you better be able to do things no Chinese can do.
LPA33X Saved me after the FTX Crash
Amazon did work in india
In India also they are struggling. Although they used some learning from the China fiasco and made some changes to their operations in India to better suit the Indian needs. Most US companies make the same mistake when they expand outside of the US, always try to apply the same strategy that they employed in the US in foreign markets, only those that adapt to the market they are serving are able to survive
BRO WHY ARE YOU NOT TALKING ABOUT LPA33X