There was a time when Amazon thought it could be a real e-commerce competitor to Alibaba in China. That time appears to be over.
This huge Kindle promotion with Alibaba shows Amazon’s shrinking ambition in China
Amazon at one time thought it could really compete with Alibaba. No longer.
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
The latest sign: Amazon is running a giant Kindle promotion across Alibaba’s shopping sites in China on Saturday — something Alibaba calls a “Super Brand Day” — in a move that Amazon would never think of doing with a major competitor in crucial markets like the U.S. or India.
Amazon has operated in China for more than a decade, but it has come to the realization in recent years that it is not going to overtake Alibaba — or Alibaba’s $60 billion rival JD.com — in the world’s most populous country. Some estimates show Amazon as having less than a 1 percent market share of the business-to-consumer e-commerce market in China.
One of the first signs of this recognition came in 2015 when Amazon set up its own online storefront on Alibaba’s Tmall marketplace. And at the Code Conference in 2016, Amazon CEO Jeff Bezos identified “one meta-lesson” on why Amazon stumbled in China.
“We mostly tried to roll out what worked well for us in Japan, Germany, the U.K., Spain, France, Italy, the U.S., etc., and it needed more local market customization,” he said then.
The China wake-up call coincided with the rise of online shopping in India — and Bezos’s belief that his company has a much better shot to become the No. 1 player there. The CEO has promised at least $5 billion in investments in India to battle homegrown competitor Flipkart, which counts Alibaba ally SoftBank, as well as eBay, as investors.
But China is too big a market to completely ignore, and Amazon obviously sees promise for its e-reader business there. The company released a customized Kindle for Chinese consumers this summer, and Amazon has said China is its biggest market for the Kindle.
For the Kindle “Super Brand Day” on Sept. 23, Amazon will be advertising the promotion across various Alibaba shopping sites in an effort to drive customers to its Kindle storefront on Tmall.
Here’s Bezos’s full interview at Code 2016 (comments on China start at the 1:11:44 mark):
This article originally appeared on Recode.net.
