From readwrite:
Before mentioning anything about Amazon, the scale of its problem must be described. In 2014, after disappointing results for their business in China, Wolfe Research Analyst Aram Rubinson estimated that Amazon was operating at a $600 million USD a year loss in China. Wow.
. . . .
Like Walmart (which is discussed in the fourth installment of this series), Amazon has a long history in China, beginning with its $75 million acquisition of the Chinese online book retailer Joyo.com in 2004. Yet even with the purchase of a profitable company, The firm couldn’t seem to grow its site to the scale and profitability experienced in the West. It has only an estimated 1-3% market share in China. This small percentage of the market indicates a problem as its sites receive lots of visitors who must be simply browsing without making a purchase. The American, British, and Japanese versions of Amazon’s websites are all in the top 50 most-visited websites in China according to Alexa (most often times the versions from other countries will reroute the user to amazon.cn, the Amazon website specifically for China).
A possible reason users are simply browsing instead of purchasing could be that there are two markets in China for people purchasing goods, and Amazon doesn’t really target either of these. The two markets are white label items which are extremely inexpensive and verified branded items sold at a higher cost directly from the brand. Alibaba has directly attacked both of these market segments. As discussed earlier in connection with eBay (see the third installment of this series), Taobao allows the sale of extremely cheap items from consumer to consumer. Alibaba’s more recent Tmall allows, for a fee, brands to verify their products as legitimate while selling directly to consumers.
Link to the rest at readwrite
While PG isn’t any sort of expert on China, he notes that Amazon has used operating at a loss as a strategy to grow its customer base for a long time. He’s not certain if that’s the company’s intent in China, however.
Certainly that’s the case in India, PG, where Amazon is taking huge losses for long-term gain, but in India Amazon is actively expanding.
In China the consensus view seems to be Amazon is making no effort to get further engagement at this time.
The losses are presumably justifiable (and affordable) to keep Amazon CN as a placeholder for the future when things might change dramatically.
Meantime Kindle China has given some great returns for those of us who have made the effort to engage. Not easy given Kindle CN is not part of KDP, but still possible.