Peeling off the Kindle's large-scale out-of-stock appearance: Amazon's business in China continues to shrink

As Amazon's star product, the Kindle has attracted much attention this time.

On January 4, the Kindle was considered to be an abnormal situation in the domestic Kindle product line due to a large-scale shortage of products in the domestic official self-operated store, and amazon's e-book business was about to withdraw from the Chinese market.

On the same day, the Reporter of China Times called Amazon's official customer service on this issue. The customer service told reporters, "The news received at present is that some of the Kindle models are sold out of stock in the Chinese market, which is not related to the withdrawal from the Chinese market, and all the business of Kindle is operating normally." He also said that the shortage may be a problem with JD.com's warehouse inventory or Amazon's supply chain, and Amazon is officially in a wait-and-see state.

In the nearly ten years since entering the Chinese market, Amazon's Kindle business has grown rapidly in the Chinese market, and with the addition of more and more competitors, this product is gradually "out of favor".

Large areas out of stock

The reporter found that in the flagship store of the Kindle Jingdong self-operated store, only one entry-level Kindle product was on sale, and other products were shown to be out of stock.

The store's customer service told the "China Times" reporter, "The goods are out of stock because the manufacturer lacks chips, and some of the goods are hot." He also said that the shortage is not removed from the shelves, and subsequent products will arrive one after another, but the specific arrival time cannot be determined.

JD.com is Kindle's only online sales channel in the Chinese mainland market. The above-mentioned Amazon customer service told the "China Times" reporter that in 2019, Amazon has stopped selling Kindle devices, when Amazon granted the online distribution rights of Kindle devices to Taobao and JD.com. At present, the Kindle device online is only authorized for JD.com to sell, so it is normal that Amazon China official website devices cannot place orders.

It should be mentioned that just in September last year, Amazon also released the fifth-generation Kindle Paperwhite with a retail price of 1068 yuan, but Jingdong's self-operated stores show that there is no such device for sale.

Jiang Han, a senior researcher at Pangu Think Tank, analyzed the "China Times" reporter and believed that for Amazon, the Kindle business is a relatively influential business, but the proportion is not high. "This business does not rule out the possibility of withdrawing from the Chinese market, because the entire ink screen and e-book reader industry, including the Kindle, has been in a tepid state in the Development of the Chinese Market in recent years."

Internet analyst Ge Jia told the "China Times" reporter that kindle has a first-mover advantage in similar products, but with the popularity of smart phones, changes in reading habits, and the rise of competitors, it has not developed smoothly in China for many years, and its profit model has also been challenged.

He believes that kindle sells devices at lower prices than cost, and the profit is mainly through subsequent sales of digital rights. However, digital rights trading in the Chinese market is not active, and this profit model has also failed, and the long-term lack of core has aggravated its cost pressure.

The Chinese market is contracting

In 2007, Amazon launched its first Kindle e-reader. In 2013, the Kindle officially entered the Chinese market, and six months later it was rumored to have achieved profitability in China. In the five years since entering China, the Cumulative Sales of kindle in the Chinese market have reached millions of units. In 2017, Amazon also launched the world's first co-brand, Kindle, tailored specifically for the Chinese market. At the time, Amazon said China had become kindle's largest market in the world, and that the market was growing at a double-digit rate every year.

However, in recent years, in addition to the launch of e-readers by companies such as iFLYTEK, Palm Reading and Hisense, active users such as WeChat Reading and QQ Reading are higher than Kindle's e-reading Apps, and the emergence of these competitors is gradually squeezing the living space of Kindle.

At present, Amazon's business in the Chinese market includes overseas purchase, Amazon global selling, Kindle and Amazon cloud computing business.

As one of the few businesses of Amazon in the Chinese market, the background of the outside world that it is considered to be withdrawing from the Chinese market is that in July 2019, Amazon, which has been in the Chinese market for 15 years, announced that it would no longer operate the Chinese domestic market business and stop providing services to merchants. This means that Amazon no longer has its own e-commerce business in the Chinese market.

Previously, in August 2018, Amazon also stopped providing FBA seller services to third-party sellers in China, and the number of fulfillment centers in China was reduced from the earliest 15 to only Shanghai operation centers and a number of bonded warehouses.

Ge Jia believes that Amazon has developed in China for many years, and there are major problems in the strategy. In the past, due to Amazon's conservative strategy, it did not follow up the "price war" of domestic e-commerce, resulting in its failure to gain a foothold in the Chinese market. He told the "China Times" reporter, "The Chinese market is a relatively important market for Amazon, but in the process of competition in the entire market, Amazon's level of competition in the Chinese market is not as good as that of Ali, JD.com, Pinduoduo and other companies, so it is normal for some businesses to shrink or expect to decline." ”

But the previous contraction of Amazon's business in China has not affected the global capital market's optimism about it, as of January 4, Amazon's market value reached $1.73 trillion, which is 5 times that of Alibaba and 16 times that of JD.com.

Responsible Editor: Huang Xingli Editor-in-Chief: Han Feng