Amazon in China, failures in China

• 1. Amazon was overconfident, thought it would translate to a different market
  2. Amazon bought joy.yo -> rebranded as Amazon.cn
  3. to introduce new products, amazon needed regulatory approval, which caused year long delays
  4. gradual failures
  5. Chinese market was oversaturated
  6. the existing Chinese companies new the trends of Chinese consumers (JD and Alibaba as better connections)
  7. JD and other existing companies were efficient and speedy
  8. Amazon had ill equipped leadership
  9. the Chinese entrepreneurs were much more aggressive, local, and before were the only market in China
• Why was Amazon attracted to China

  1. big middle class
  2. big market
  3. fast growing economy
  4. extend their global reach
  5. e-commerce business was successful
  6. some business model in China
• Why Amazon failed in China

  • Didn't understand the market
  • Local competition from JD, Alibaba created an aggressive environment
  • Miscommunication between Amazon leadership, lack of local leadership
  • Slow delivery, expensive 3rd party delivery especially for the last mile
  • Didn't understand the priority of the consumer - they wanted speed
  • Needed to pass through a lot of regulation
  • Issues with marketing - couldn't replicate Singles' Day discounts of competitors
  • Caused price wars, couldn't compete
  • Saturated market
  • More aggressive Chinese entrepreneurs
  • Overconfident, narrower product selection
• What could they have done better

  1. take time to understand the market culture
  2. focus more on consumer needs
  3. wait for the regulations
  4. participate in cultural events -> single's day
  5. in house delivery
  6. use their methods of payment
• Canada and China relations

  1. Yes - make us more resilient as an economy, less dependent on China
  2. No - Already have a relationship, prices low, efficient