It will close its marketplace in China in the coming months, which means that Amazon customers in the country will no longer be able to buy goods from Chinese sellers.
Amazon ( AMZN ) did not explain why it was withdrawing from the marketplace and said it would only focus on selling goods shipped from other countries to China.
We report sellers we will no longer operate a marketplace on Amazon.cn, and we will no longer offer merchant services on Amazon.cn July 18, the company said in a statement.
Amazon's platform competes for Chinese sellers with Tmall, owned by the country's e-commerce manager Alibaba ( BABA ) .
Amazon first entered the Chinese market 1
5 years ago when it bought an online book retailer, but it has struggled in fierce competition. Research indicates that the company's market share in China was small compared to local rivals.
China's online store market is large, increasing annually by about $ 2 billion, according to research, firmer eMarkets. The US market is worth just over a quarter of it.
The Chinese market is dominated by Alibaba, which accounts for more than half of all transactions, and local rival JD.com ( JD ) shows eMarketer data.
"There is too much domestic competition and Amazon lacks the type of branding that Tmall or JD.com has," said Ben Cavender, analyst at China Market Research Group. "It leaves Amazon in a position where it has to spend a lot of money to acquire customers while competing aggressively with more strong players on price."
Singles Day, Alibaba's annual online flash expenses, regularly raises larger sales than Black Friday and Cyber Monday combined.
Users logging into Amazon's Chinese site after July 18 will see products sold from their global store, the company said.