Abstract

This case discusses the challenges faced by Elaine Chang (Elaine), VP of Amazon.com, Inc., and President, Amazon China, as she endeavored to expand the company’s footprint in China. Amazon entered China in 2004, but was still struggling with less than a 3% share of the country’s e-commerce market in 2017. Amazon entered China by acquiring Joyo.com, which was an online bookstore, and expanded to an online website to sell different consumer goods. Amazon adopted certain localization strategies to win market share and also introduced Amazon Prime to offer better delivery services to Chinese customers. It also opened a store in rival Alibaba’s Tmall.com. However, despite these efforts, it failed to make a mark in China. Amazon was facing a lot of competition from rivals such as JD.com, Tencent, and Tmall.com. In addition to this, the regulation of the internet by the Chinese government, fraudulent and counterfeit sellers, and government restrictions on foreign investment also posed big challenges for Amazon. Elaine had the big responsibility of building a revival strategy for Amazon in China.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Evaluate Amazon’s entry and expansion strategy in China.
• Understand the importance of the Chinese market to Amazon’s growth.
• Examine Amazon’s efforts to localize its offerings in China.
• Understand the issues and challenges faced by Amazon in China.
• Explore future strategies that Amazon can adopt to grow in the Chinese e-commerce market.

Keywords

International management, Globalization strategy, Evaluating country market attractiveness, model of entry, ‘Global-local’ dilemma, Localization, PEST analysis, Porter’s five forces model, BCG Matrix