As a person have actually used TaoBao, JD, and Amazon.cn, I can tell Amazon.cn was far behind them on both execution and product variety. I only have a vague impression of China's rules imposed on business, if they did, for sure Amazon was screwed so badly it didn't move a single inch over the past few years. Literally done nothing at all to compete. I'm not surprised they gave up.
Never used z.cn but saw a few neighbours ordering from them in Shenzhen. Probably recent tech books in English I guess. I did try AWS in China and it was absolutely shocking. Clearly they never prioritized China and the inevitable happened. I run a business in China, it's not easy but it's interesting.
"To provide the best experience for customers in China and to comply with China’s legal and regulatory requirements, AWS has collaborated with China local partners with proper telecom licenses for delivering cloud services. The service operator and provider for AWS China (Beijing) Region based out of Beijing and adjacent areas is Beijing Sinnet Technology Co., Ltd. (Sinnet), and the service operator and provider for AWS (Ningxia) Region based out of Ningxia is Ningxia Western Cloud Data Technology Co., Ltd. (NWCD)."
As an active user of AWS China, let me tell you that don't take those words at face value. AWS China business actually is growing really fast for past several years.
In amazonaws.cn there's no KMS and they only gave the ability to use virtual MFA devices at the end of 2017 [0]
All of this is to say nothing of the additional restrictions imposed by the government -- I agree with contingencies that it's "not easy" to run a business in (AWS) China, but I think that at this point everybody who's seriously thinking about doing so knows what to expect.
They offer KMS literally every region except China. No point in running a security/encryption service in China when they're just going to steal the keys.
The tragedy here is that the government isn't the only adversary. Without encryption, users are being left exposed to black hats who can get at the backend storage, either through hacking or through failure to securely decommission physical storage media.
AWS in China is, like, doing the best job that the government in China allows them to do. It's not very good. Almost everything that might provide an inconvenient security barrier to inspection is absent.
I heard AWS works in China, just not sure how well. Considering the GFW, I wouldn't have chosen it for projects serving Chinese users. Likely same consumer mentality is also playing a part against Amazon.cn and other foreign tech giants.
You see that is the thing. Actually I was too afraid to type this in my another comment as it might anger man. But that is exactly what I felt.
And I don't even understand why, they didn't even try.
TMall ( Spin off from Taobao offering higher quality products ) was only established in 2014, and that was targeted as slightly premium segment where Amazon could or should have been. So it proves the market did exist, Amazon for what ever reason failed to capture it.
The discussion in this thread shows how blind people are about China's development. They are pointing fingers to the Chinese government partly because they simply cannot imagine how much better the China competitors are. The US do have some advantages in the IT industry, but that advantage is getting slimmer and slimmer. In fact, in so many ways, people in China are enjoying much better services from the internet companies than people in the US. But people in the US simply cannot see it, and cannot believe it. For ordinary people, I don't blame them. But most of people on HN are from this industry, and they are the same! This just makes me speechless.
The China competitors are better because they are actively helped by the government while foreign companies are not, and in this case actively suppressed.
Competition only works when the market is fair. Perhaps Amazon could not make as good of an offering but their marketshare was 15% 10 years ago and China is a large, homogenous, and modernized population like the US which is perfect for Amazon's scale strategy. It's a hard sell to say that a trillion-dollar company does not have the resources and talent to do what the people in the next building can.
> It's a hard sell to say that a trillion-dollar company does not have the resources and talent to do what the people in the next building can.
By that notion no startup will ever win agains the titan. And Apple would not have been the largest market cap company today when they had M$, Blackberry and IBM in its era.
The truth is, even if the full Amazon experience in US were replicated today in China ( Where Amazon had a home ground advantage and had much longer time to refine their infrastructure and strategy ) it will still not be anywhere as good as what Alibaba/ Taobao / JD.com has to offer.
That is on the consumer side of course, in terms of AWS their offering ( knowledge and understanding ) are very much behind.
Amazon failed in execution and strategy in China. And they learned their lesson when they enter India.
Usually I would put a few words on Chinese Companies having the advantage of literally infinite burn rate to increase revenue while competing. These money comes from VC which is funded by the government anyway. But knowing Alibaba its major share holder is Yahoo and Softbank along with a few other outside investors I don't think that is anywhere near true.
Western companies, US and others alike, are helped by their governments too. Telcos are granted monopolies yet they deliver horrendous infrastructure for instance.
Can you pinpoint what happened 10 years ago that resulted in Amazon losing share?
Just because Amazon had money or has money doesn't mean it can't get disrupted. Otherwise, we'd all be buying from Sears and using AT&T for video calling.
Could you go into more details on how exactly Amazon was "suppressed" in China while the competitors were helped? If not you're talking out of thin air.
Sure, but definitely not to that extent, competitors are certainly not suppressed in the same way, and it's irrelevant to the discussion of why Amazon left China.
Do you mean Bombardier? The aviation company with $16B in revenue and 65k employees? Looks like there was a tariff imposed on one of their models due to a complaint by Boeing but was overturned 4 months later in Jan 2018.
If this is the company you're talking about, can you describe what you mean by "literally was ended"?
Without the Airbus deal for the C-Series Bombardier was basically in bankruptcy exactly because of those tariffs. It felt like quite a targeted attempt to, as you put it, suppress competitors.
Seriously, Alibaba's e-commerce side operates at a scale that makes Amazon's entire North America (if not global) operation look like a 7/11 store hosted on Geocities.
Last year on Single Day alone, Alibaba handled over $30B in orders with 24 hours, and more impressively those are spread over 1,000,000,000 separate deliveries orders. It means it handled the ordering and payment processing of 11,574 orders per second, and then fulfilled and delivered those ONE BILLION orders within the next 48 hours.
Can you even imagine being an Alibaba warehouse worker during that couple days?
Definitely impressive, but certainly not delivered within 48 hours. I’m based in Shanghai and use Taobao/Tmall on a near-daily basis. There was a noticeable slowdown in order for at least a week or two on either side of the holiday. For regular items, if you order it right before the holiday, you may not get it for a couple of weeks in some cases.
Doesn’t take anything away from what Alibaba is doing. It’s a huge spike over their normal business operations. I would be surprised if it didn’t cause a disruption of some sort.
While it is an impressive technological feat indeed, note that Alibaba doesn’t handle their own logistics. It’s more like eBay where the sellers are supposed to fulfill their own orders.
Would not go as far as to say "delivered" in 48 hours. Shipping can be relatively slow during those promotional days and the app even shows delay warnings on the cart screen / checkout.
True, but remember "slow" means something quite different in China where same/next day delivery is very often expected in top tier big cities. So 3-5 days delivery is definitely considered slow, and during these crazy period you may see the glacier speed of one week delivery time :)
Not just in e-commerce, the convenience living in China has far passed America, such as in mobile payment, food delivery, bike sharing, WeChat with its tremendously useful ecosystem, the subway system, high-speed rails, etc.
Having lived in both China and America, I have to say the living standard in Chinese cities has passed America's in many ways and, more importantly, the speed of China building new facilities is at least 10x of the US. Many American believe there's a competition between two countries, but IMO the competition is already won. Chinese no longer see the US as a competitor in many areas - you rarely hear Chinese Internet companies learning something new from their American counterparts today, or people envying America for their way of living. It's the opposite I found worrisome, that America is losing confidence and becomes more insecure day by day.
Food delivery and bike sharing work well in China because of the scale of the cities and lower cost of living. When you have millions of people densely packed together, dumping a ton of bikes everywhere may be feasible. Even then, there's known issues, like how currently the biggest bike vendors are struggling for profitability. Food delivery is occasionally cheaper than buying at the store, due to VC style subsidies and lower cost of human labor. Delivery logistics are incredibly cool to me though. Real time location tracking for food/package deliveries is impressive. It'd be amazing to see something similar in the US.
Advanced logistics technology is a part of the New Retail happening in China that revolutionizes the customer experience in shopping and living daily life, though integrating online, offline services and logistics. It's more than just delivering your food or automated convenience stores. There are quite a few companies utilizing AI and big data to drive New Retail to the next level. Recommend some articles on this topic：
GDP per capita can be misleading and doesn't translate well into the quality of life, certainly not how convenient and safe you feel living there. Anyone who lived in China for a while would agree.
I see no problem submitting China-related news since I live in the country and Chinese technology is my focus, and HN folks deserve to know more about the development of Chinese technologies. I should submit more often. The fact that people are 'shocked' to hear Chinese company winning western counterparts as shown in the comments under various China posts in HN proves my point.
I'm curious what you think this confidence buys the west. Like, is it actually beneficial to be overconfident? Let's say you're right and he's wrong. The consequence of overestimating China is slight. So, we were a little worried when we didn't have to be.
On the other hand, the consequences for a nation or a business of underestimating China could be catastrophic. It could mean finding your business or nation suddenly cut off by a competitor you didn't plan for. It seems to me that rational self interest alone should bias the west towards overestimating rather than underestimating China.
It almost feels like an anxious insecurity, as if admitting that China might catch up might make it so, when sticking our heads in the sand about the possible threat is way more likely to ensure we are overtaken.
That's a quite peculiar definition of "troll". Why can't somebody have a particular focus on a certain type of news/discussion? Your comments read much more like trolling.
Yeah I visited a retail expert panel and they were talking about how in the 80s and 90s we looked at the US for trends and now China is the inspiration.
Malls are out apps are in. Its almost scary how fast physical retail is dying.
Amazon has literally won everywhere else in the world. But in China they were slow at execution? Does this read right to you? Or maybe there is a regulatory angle which no one is talking about because...China.
> Amazon has literally won everywhere else in the world
I've mentioned it in another comment, too, but Amazon is not present in my Eastern European country (Romania), where Alibaba beats them by a large margin (even though they're also not officially launched here). I've just done a quick search and it seems Amazon is not winning it in Russia either, nor in Ukraine, to say nothing of India. As such, to say that they are winning "everywhere else in the world" is not really true, they're only winning in North America and some Western European countries (too lazy to search what really happens in South America or Africa).
As far as India is concerned, Amazon is definitely giving a strong competition to Flipkart(the Indian counterpart).
For most people I know, Amazon is the first go-to store for any online purchase.
It's interesting to see, how Amazon will fare in near future, due to recent change to e-commerce law by Indian govt.
I’m a Romanian. What do you mean Alibaba is beating Amazon in România?
I’d say that’s hyperbole. Neither of them are present here and if I were to guess judging by my own experience, I’d say that Amazon is still more popular.
Do you have hard numbers?
Of course neither of them hold a candle to the local eMag, but that’s only natural.
It’s hard to get hard numbers on this but in my circle of acquaintances “you can find it on Alibaba” and variations of this has become almost like a noun, like “I’m going to make a Xerox (i.e. a photocopy) of this paper”. I’ve never heard anything similar concerning Amazon. My acquaintances are mostly non/tech people, 25 to 35 years of age, from Bucharest. Emag is of course a totally different beast but I had chose to ignore it because it didn’t directly concerned the article.
Slightly OT, I’m also curious how come no analyst is mentioning FB marketplace as a competitor to Amazon.
I am not talking about literally every country in the world. But most countries that matter, in terms of the combination of their population and GDP, Amazon is there or nearly there in terms of being the top player in the market.
Also just a personal observation, but I don’t see many people using eBay anymore, maybe for some special niches (for example stuff you would find in a Home Depot is often better to get from ebay since it’s probably to large for amazons fulfillment anyways). But in general everyone here orders everything from amazon (if you look in the back of a delivery van it certainly looks like it). Only in fashion they do a very bad job, there is is Zalando all the way here.
In Romania there's also the local emag, who's doing a pretty good job at filling Amazon's shoes and has been here forever. The Chinese competition is relatively new.
There are rumors Amazon will open officially soon, but they'll have a hard time if you ask me.
I'm really surprised about India, that's news to me, I knew about the US and Western Europe situation but that doesn't equate to the rest of the whole world, as I was saying. I have to say that I'm a little skeptical about your claim of them dominating SE Asia, as a quick search drove me to this article from September 2018 [1] where it says that they're about to enter the market in Indonesia (which dwarfs Australia in terms of future potential) after Alibaba had done the same thing.
The expected investment also doesn't match Alibaba's, the Chinese have apparently come up with $1.1 billion while Amazon is coming with only half of that value, i.e. $600 million. But maybe they're doing better in Thailand or Vietnam.
As an Australian I can confirm that Amazon launching here was a hotly anticipated disappointment. Amazon US is (was) far more popular in Australia than Amazon AU is now, for many reasons including price and breadth of product.
In order to force use of the AU site they blocked sales from the US site to Australian customers, which caused endless irritation and frustration.
Their excuse for the block was the new GST laws but they have removed that now so the US site can be used.
It seems that the relatively quiet launch and slow growth has been intentional. As long as Amazon maintains a decent level of investment here I think they will continue to grow and possibly eventually be dominant.
Only recently have they ramped up advertising and started putting their listings onto Google Shopping.
SEA seems like a terrible place to run an e-commerce marketplace. A bunch of competition that seems pretty content to run at a loss to try and build market share.
And Amazon is also big in Brazil, Mexico, Japan etc. I think it is suffice to say that my point wrt Amazon dominating global eComm is fairly well laid out. Well, except for "China".
When I was in Belgium and Holland about 3 years ago Amazon was not available due to some tax dispute with the governments and so it was suggested that I use the German Amazon site instead. The selection was lackluster and Prime was unavailable.
It was quite startling for someone coming from a relatively small city in a sparsely populations part of Western Canada this was quite a surprise.
I had always assumed that given my remote location people that lived in densely populated regions would be better served by Amazon.
Eventually they will probably have distribution centers in each capital city. Delivery in Melbourne is pretty fast, depending a bit which courier they use. A lot of their orders seem to come via Toll which seems to vary a bit in speed.
I am originally from The Netherlands and used Amazon a lot over the last 15 years or so, mainly to buy books. Especially when regarding books, their biggest Dutch competitor (Bol.com) offers much more limited choice.
But I did notice at my last job in The Netherlands that people would often order technical gadgets and the like from Alibaba.
> and it seems Amazon is not winning it in Russia either, nor in Ukraine
Russia is a very protected hyper nationalistic market, in exactly the same way China is. Their culture is segregated off from much of Europe in terms of being 'westernized.' Instead of westernized, it's a quasi separate, rather differentiated Russian culture (all the way down to the music). It's why Russia has Mail.ru, VK and Yandex, instead of eg Google dominating on search.
Ukraine is a partial extension of what is dominate in Russia, so for example VK and Yandex are very popular in Ukraine as well. Most of Ukraine fluently speaks Russian, and they've been culturally and politically dominated by Russia for a long time. This is why there has been a push by some prominent nationalist politicians in Ukraine recently ("Army, language, faith") to emphasize their own culture and language, and de-emphasize Russian culture and language. If you go to Kharkiv - Ukraine's second largest city, near the border with Russia - the people there often can't speak their native Ukrainian (they can usually read it), everything is in Russian.
Living and working in China and having experienced Amazon's competitors, yes, that does read completely right to me. Amazon is crushing it at everything back home. I don't hesitate to buy many things from Amazon when at home. But in China, the jd.com and taobao.com experience is way better than what I experience from Amazon when I'm at home.
Well you don't know why they haven't been able to execute quickly. Maybe that approval they need to start a service wasn't given? Maybe the partnership they needed from the local delivery channel was delayed? Maybe the sellers were restricted to sell only on domestic companies?
JD and TMall have about close to 1,000 distribution points in the major cities with at least 10,000 delivery people each. Same day delivery is standard (order before 10am and it arrives by 6pm) for a lot of products.
Install and building furniture at your home is also a common feature. Two day delivery is slow.
Amazon isn't willing to invest the money and for most products on their site they still don't stock products locally. Half the time I find products on their site I have to wait 2/3+ weeks for it to be imported.
There is nothing stopping them having local stock but ... they don't.
I don't think it's logical for them to have local stock. That would require a HUGE capital investment to build up infrastructure and distribution points to go head to head with the locals. I bet Amazon's CFO looks at that and then tells Bezos, "Hey, these numbers are completely irrational, let's spend the money elsewhere where we'll have a better return on investment, please."
Amazon is used to building out localized infrastructure AFTER demand has been proven. In China, local competition already exists and that's why they are getting their asses handed to them. It also seems like Amazon.cn isn't given the leeway they should have been given for local execs to make those kinds of calls. They (Amazon) do a lot right, but that doesn't mean their approach is always right.
Amazon's infrastructure roll out paid off in the United States because there was little competition. They rushed out infrastructure and cornered the online shopping and delivery market. Walmart and the other big stores had an entirely different business model and their warehouses and infrastructure took time to adjust and catch up, with Amazon still in the lead.
In China, the local competitors already have a significant head start on their infrastructure, and Amazon would be playing catch up in a relatively unfriendly market. It could take them forever to recoup the investment, if they ever did.
Unfortunately, they can't compete without that infrastructure in place, so what else can they do but leave?
Yeah - and Jeff seems to be the type of guy who is like, you are right CFO. We are here for the short term - let us do what you are saying?!
China is the biggest eComm market in the world! If there was an opportunity for Amazon to penetrate (regulations being the biggest challenge), Amazon would have totally gone for it.
This is a company why, 5 yrs back, committed $5B to India when eComm there was/still is totally burgeoning.
And 5yrs ago was 2yrs after Amazon launched in India. Anyways, Amazon is dominating eComm in India and it seems like the early lead which Flipkart had didn't count for much.
Having lived in both China and US/Canada, I would say jd and taobao is far ahead of American Amazon. Some key differentiators include delivery speed, UI/UX, product offerings and the ability to chat with merchants instantly.
Amazon has same day delivery and prime now in a lot of the US - I can get the same order before 10 get before 18 from Amazon in my town.
I don't have a ton of experience with UI/UX on JD or TMall, but my experience with alibaba and aliexpress hasn't left me particularly impressed there. But I also have no problem with Amazon's interface and experience in general, which I know lots of people don't like.
Product offerings have never been an issue for me. The overwhelming majority of my online purchases come from Amazon, and the ones that haven't made recently have been pretty niche - handmade Japanese chef knives, limited run board games, manufacturer direct audio equipment...
I can get assembly for furniture, etc., as an add-on for a lot of purchases on amazon, which someone mentioned as a differentiator in another thread.
I can't talk to the merchants instantly, but I don't know that I really want or need to. I rarely have a question for them, and when I have, I generally don't want to get bogged down in a live chat or phone call or whatever, so the email system on Amazon works fine for me.
What you are talking about is a US experience... it's not like that in China from Amazon. They haven't built out locally, and have neglected to acknowledge local competition and invest in local infrastructure properly.
> What you are talking about is a US experience...
Correct.
Because that's what this comment thread is about.
Grandparent:
>I'm curious is this because jd.com is far ahead of American Amazon or because Chinese Amazon is far behind American Amazon?
Parent:
> I would say jd and taobao is far ahead of American Amazon
The question was whether or not JD and Taobao in China are better than Amazon is in America. Not whether or not Amazon in China is as good as JD and Taobao are in China.
> Amazon has literally won everywhere else in the world.
Disagree. I live in northern europe and haven't used Amazon since moving here. Every single product is "doesn't ship to your location" etc., there are domestic and local competitors that are superior - to say nothing of the China based suppliers, and of course amazon has sub-par customer service even in the US - but there at least their infrastructure and product catalogue let them carry the day without breaking a sweat.
I'm sure that if you live in a market that is well served by Amazon.co.uk or Amazon.de they offer a user experience that's at least broadly similar to that in the US, but e-commerce is an evolving beast. As far as I can tell amazon hasn't changed meaningfully in the last 5 or 6 years (and their website is famously, almost comically, static), only a matter of time before someone else starts beating them at their own game even in core markets.
Can you name me where it has "won"? Apart from US, UK, Germany, Not entirely sure about Canada, Italy, France, Spain. And I can give you India as they are fighting hard.
China, South Korea, Japan, Taiwan, Hong Kong ( Doesn't even have a presence ) Most of SEA, Australia, Holland, Denmark, Sweden, Finland. all of these failed in one way or another or is in no way the majority online market leader.
One of the problem with online world is that most International news outlet are really US focused and they publish article saying the world when they meant Western World, US focus, EU secondary, and largely ignore Asia, Africa and South America.
Amazon is not available in the Netherlands. There is already a large party, bol.com, that through deals with the post-office can deliver same-day delivery throughout the Netherlands, provided the order came in before 2pm. Otherwise, they provide next-day delivery.
They were acquired by the largest super market chain (Albert Heijn), so now you can pick up packages at the super market throughout the day and in the evening. I think both of these advantages are difficult to match by amazon, and they were probably the reason that amazon chose not to enter the Dutch market.
Just because Amazon has 'won' in most places, does not mean they can not be beaten by a player who knows the local market and has better connections.
I don't believe Amazon is really well known in Thailand either. I live in Thailand and from what I've seen people tend to buy stuff online at shops like Alibaba, Central [0], Lazada [1], Shoppee [2], perhaps some others as well. I think Amazon is virtually unheard of here, except by expats.
This is a false statement. Amazon is completely outcompeted by equivalent firms such as Alibaba-owned Lazada here in southeast asia. I think the only place Amazon has "won" is in North America and Western Europe. But sure, continue thinking that it's the evil Chinese making things unfair for Amazon. This is complacency that caused Japanese cars to overtake American cars in the 60s.
> Amazon has literally won everywhere else in the world.
FWIW, Amazon is also quite small in South Korea, which is the #1 country in ecommerce spend per capita.
There, the market is fragmented into many players big and small, and the delivery times are much shorter than in the US. For instance, if you order on Martet Curly before 11pm, you get fresh grosseries delivered the next day in the morning.
> Amazon has literally won everywhere else in the world.
Amerikan exceptionalism! In my country, Amazon doesn't even exist. And we use several different ones. The song "We're all living in Amerika" doesn't apply anymore you know?
That is hardly a convincing evidence. The IT industry in China is the only one in the world that is comparable with that in US. In a lot of areas, it is even better than US. I think online shopping can be counted as one of the areas. No other counties is capable of providing the level of competition as the Chinrse market does. Be responsible to your own loss, please. That’s what grownups do.
Honestly they're not doing great here in Japan. Usually I order stuff from the .com version because .jp is really lacking. Most people who live here and speak Japanese natively just order from the separate online stores of Japanese businesses I believe.
What's with these comments that Amazon couldn't win in China because they didn't play well by Chinese rules? The article paints a pretty compelling picture that the issue is that Amazon couldn't compete well with local companies. If they were that bad at competing, they wouldn't need conflict with the government to fail, failure would be a natural effect of being unable to keep up with local competition.
Probably a combination of a few things: 1) Western audience of HN that have only witnessed the dominance of Amazon so have a hard time imagining a better competitor. 2) Ongoing negativity towards china in this area. Put the two together, and China must be cheating for Amazon to not win.
I think most people underestimate how difficult it is to compete on local turf (even without political handicaps). In fact it may very well be that Alibaba and JD are in fact the better services and would be dominating in the west if not for the same home turf advantage.
China domestic shipping relies on very low paid workers working very long hours. On top of that, Amazon have already established their delivery infrastructure in a much more expensive environment. It would be tough for JD/Taobao to break in at this point.
This is why I don't get why companies--tech giants in particular--kowtow to China in the hopes of getting access to the Chinese market. It will never happen. At least, it won't be open access. You'll have to play by Chinese rules (ie integration with the Great Firewall, storing data in China, probably integration with social credit and so on). Worse, there might be (basically forced) "IP transfer". Even after all that, the government will make sure that you don't dominate any market. There'll be a Chinese version for that.
There is absolutely zero point in trying to mollify the Chinese government.
Perhaps you didn’t read the article. This has nothing to with government interference. Local players in China are very strong with likes of Alibaba doing massive shopping festivals that easily rivals Thanksgiving. Two day delivery is China is considered slow and nothing to be proud about. On the top of this, it looks there were control issues where leaders at Amazon.cn weren’t empowered to make decisions. I actually would rather ask reverse question: why Alibaba etc aren’t bigger in US or Europe given their far more aggressive take on offering huge catelog at lower prices with ultrafast delivery.
I wouldn't think that is a bad thing per se. Countries who can consume and produce within themselves are going to succeed more than those who primarily import / export. If I were the Chines government I'd want to keep Amazon out as well.
Take the natural experiment of the Korean peninsula. Who would prefer to live in the (relatively) free-trading, cosmopolitan hellhole of South Korea when they could live in the utopian autarky of North Korea?
> Countries who can consume and produce within themselves are going to succeed more than those who primarily import / export.
What? This runs counter to basically all of human history and the rise of open/free trade. People should produce what they are best at and trade accordingly, which optimizes workflow for all market participants. Central planning of economies works exceptionally inefficiently and leads to imbalanced products available. Just ask the USSR and the availability of food.
Nobody is shouting or being required to shout. What is lacking is simply evidence on how Amazon was actually "suppressed" by the gov. Without concrete evidence the comments are just echoing blanket anti-chinese propaganda without acknowledging the possibility that some Chinese companies could be simply more agile, innovative and adoptive to this market.
Companies like Harley-Davidson, Ford, GM, McDonalds, Dominos are running fine in India because they have plenty of local competition and create local jobs.
Walmart, Amazon are seeing resistance because they could potentially put thousand of small business owners out of work.
Boeing, Intel, Corning are doing great business in India because there are no local alternatives.
I've even seen automotive lifts for auto repair shops with Made in USA in red-white-blue decals at local repair shops.
Companies like Visa and Mastercard will see protectionist moves by the government as India goes digital 'cause there is no reason for a foreign duopoly to corner the huge market in India.
I was referring specifically to ecommerce players, in the context of the recent protectionist laws enacted by India in that area. And it is more than just protecting small business out of work since the laws specifically target foreign investment.
I personally would defer judgement on why Amazon is leaving; Alibaba tends to be the most competitive of the Chinese internet companies, and has a corporate culture very similar to Amazon (frugal, but with 996).
But Alibaba isn’t really Amazon’s main competitor, they are much more B2B than B2C, it’s only when you throw in TMall or Taobao that comparisons become more apt. When I was living in Beijing, my wife and I never used Alibaba, it was always JD.com or some other consumer oriented site, and even Amazon sometimes (though mostly because the Microsoft China trade Union kept giving us gift cards as a kickback).
> why Alibaba etc aren’t bigger in US or Europe given their far more aggressive take on offering huge catelog at lower prices with ultrafast delivery.
Alibaba is pretty big here in Romania. One could say that that happens because Amazon isn't officially present on the market, which is true, but neither Alibaba is officially launched, people use it because the stuff on their website is really, really cheap and the cost vs what-you-get ratio is pretty reasonable. I also wonder how come Alibaba isn't bigger in some Western European markets.
I once knew the guy who was a de facto operations chief for Ali Express from 2010 to 2015. He was saying that he pretty much had to fight with higher ups for them not to purposefully sabotage low end wholesale buyers and vendors.
According to him, his higher ups hated the idea of Ali Express turning into "Cheap Chinese Goods Site®." Just as all Chinese "old boss" types, they had that unhealthy obsession with chasing "high profile" image in everything.
They were fuming about them not being able to enter American market, and that no proper Western brand wanted to play with them.
Few people know, but until Alibaba bought Lazada. Russian market was making Alibaba more profit than all other foreign markets combined, despite them spending zero on marketing there, while American market was eating tenths of megabucks of advertising spendings, and not making a dime.
> What is the average delivery in days when shopping from Alibaba?
It's not for the same-day delivery crowd, that's for sure, afaik it's from a few days to a week or two. But, like I said, the price is sometimes so low that for a lot of people it's worth it.
> Do you get huge delivery fees akin to Amazon and eBay?
Not as far as I know. There used to be a loophole (or maybe the customs people were too lazy to enforce the law) where you didn't pay VAT for purchases that were not that high but that has changed lately, which added approximately 20% to the costs. Even so, because the prices are comparatively speaking so low it doesn't make that much of a difference.
Of course, I wouldn't advise trying to purchase any branded things or luxury stuff from Alibaba but you can find pretty nice things in there at impossible to beat prices if you don't care that much about the label.
I wouldn't go for almost any online store if I look up luxury items anyway. ;)
But when you want to get 4 cables of this kind, 2 cables of that other kind, 3 LED arrays, and 2 books -- which total $35 -- it feels pretty awful to actually have to pay about $65 due to delivery fees and whatnot.
So I am thinking that for all those smaller purchases I'll just go for Alibaba.
(BTW I also noticed our customs caught up on lower-cost items' VAT and it's not pleasant.)
Since China is also known for all-levels number fudging and revisionism, and state policy and culture has a tendency toward brigading that'd make tumblr blush, the "anti-china propaganda" tends to be a tad more credible, no?
Is that how the process works now? Go with whoever tends to be be a "tad more credible." Everyone has agendas, and you'll go nowhere comparing the relative strength of everyone's agendas.
Simply stating something likely done by Alibaba, but not necessarily true not only adds nothing to the conversation, but detracts from the journey to the truth. If we accept his statement as is, then you may as well accept anything anti-China simply based on the fact that it is anti-China. But doing so of course would be openly declaring yourself as an agenda-based biased actor.
Not anything, but well, China's a corrupt totalitarian state that believes in information control and revisionism... and then there's also the element of performative solidarity in response to state actions (re: doping scandals, trade sanctions, Taiwan, etc).
So, I'll sing praises to China when they do something praiseworthy, but by god I'm not trusting a statistic or a press brief coming out of that place, and no-one else with half a brain should either.
Looking at the world like that is like plugging your ears and yelling "I can't hear you" whenever something goes against your preconceived narrative.
For example, when China announces they have landed on the far side of the moon, how exactly does their totalitarian governance impact the accuracy of this press brief? Is it not more beneficial for your own sake to pass on judgment (or at least defer on your judgment) based on the particular event over what their goverment is like?
It isn't as if I'm ignoring what they put out. We're not in total jingoistic denial of reality territory here :)
Regarding China's moon landing, their being a totalitarian government with a propagandistic focus matters a great deal. A lot of bad science has been foisted upon the world by similar regimes - look up Lamarckian inheritance in the USSR for instance if you haven't heard of it.
In this case though, we've got pictures, we know the rocket launched, etc, etc.
This and some of your other comments are some of the most ridiculous ones I've read out there. If somebody posted such a general blanket comment driven by ideology against the American gov without backing it up with any actual evidence or facts, they'd be butchered here. Get a grip.
They may do all of those things... but honestly you wouldn't be the one to know or to be authoritative on such facts based on your attitude and painfully obvious bias.
They do do all these things though, they do them very publicly.
Judging them based on that, based on those consistent and continued offenses informs that bias rather strongly.
Edit:
Here, lets put it this way. I don't trust the Chinese government, or anything tied to the Chinese government, because they've consistently lived down to my expectations. Read what they say, find out what actually happened, and eventually the default assumption HAS to change from "Trust but Verify" to just "Verify".
AliBaba is already gaining marketshare in Europe. The Chinese company supports local payment systems, their customer service is surprisingly good, they are actually hungry for business and most importantly CHEAP.
Amazon got a bit arrogant and complacent. Probably because of their god status in the US.
One of the best things about capitalism is that nobody is safe.
> Two day delivery is China is considered slow and nothing to be proud about.
Within Beijing/Shanghai/Guangzhou, I'm sure that's true. Can Alibaba get a package delivered to Tibet in two days? Really this is just expressing the fact that effectively all of China's industrialized economy is concentrated in three urban centers.
Are you counting Shenzhen as part of Guangzhou? Surely it’s a center of the Chinese industrial economy.
And while they might not be industrial centers, there are tens of millions of middle-class Chinese in places like Chongqing, Wuhan, Nanjing who presumably order stuff online sometimes.
I'm sure lots of people order stuff online, even in Tibet. I was asking for support for "two day shipping is no great shakes" upthread, which frankly I don't believe given the size of the country and the nature of its transportation grid.
Could be... But then again, I find it hard to believe that if Alibaba ever starts overtaking Amazon in the US, the government will just stand and watch.
There is nothing to do with government. As someone shopping online almost everyday in China, I can tell you taobao.com, jd.com are far more better than amazon.com on every aspect. In JD.com if you place your order before 10 am most of the time you get delivery same day or the next day. In taobao you have way more stuff than in Amazon, you can find a live person to answer your question instantly. Amazon is like something from 5 years ago or even older. You have to send a email for customer service, it's unacceptable, the web design, the functionality are so dated compare to it's competitor. So no one use it here.
They failed because they were not able to adapt to the Chinese market/have any competitive advantage against alibaba or JD which is the point the article is trying to make. None of what you mentioned is alluded in the article.
My contention is that wouldn't matter. If they did adapt to the Chinese market and seriously started to eat market share from the likes of Alibaba I GUARANTEE you the rules would change to Amazon's disadvantage.
Apple and Microsoft both have products that don't have any Chinese equal. Competing with macOS or Windows is probably the hardest thing to do in the software world at the moment.
Or maybe pandaily was scared to say anything against China. Honestly, the fact that there was no talk about regulation in that article is a huge red flag. Why would China allow international companies to play in their turf when they eComm can generate 100s of billions of dollars of value for local companies (as it has)?
> I don't get why companies... kowtow to China in the hopes of getting access to the Chinese market.
One whiff of the billions in potential revenue and the marketeers go into a rutting frenzy. It's only when they're doing the inevitable follow-up walk of shame that they realize what they've done.
The only reason China lets foreign companies operate in their country is to steal from them, while temporarily enjoying their capital injection. Pretty par for the course in communist countries. Except China does it with IP, technique, etc; while other countries might have let a US company build the entire oil infrastructure and then just take it over once it's complete.
While your criticism is valid, the article was trying to say that Amazon China was not responsive to local condition and competition. The slow response was the proximate cause of Amazon China's failure, but ultimately even if they were successfully competing they would have eventually ran into the problems you described.
"In traditional China this ritual was performed by commoners making requests to the local magistrate, by the emperor to the shrine of Confucius, or by foreign representatives appearing before the emperor to establish trade relations."
https://www.merriam-webster.com/dictionary/kowtow
I hate the way I've at least seen people use that word in the US. They almost exclusively use it in reference to China, and it's just awkward. Not racist, but just weirdly racial the way they use it and the tone is gross. Hard to put into words.
Apparently this is a controversial revelation to some of you:
Why wouldn't you use in reference to China? It originates from the Cantonese language (probably because of the amount of Cantonese speakers in San Francisco back in the day) and in China.
Most people will know what it means if I say el <insert word>. But it's like if I only say el <insert word> when my Mexican friend is around. Just weird, and not necessary.
Or since that example apparently goes over some of your heads, it’s like how some of you only use “bruh” and “yo” and “what’s good” around me, your black coworker and no one else.
I know that this is anecdotal and not necessarily representative of anything, but, I hear people use kowtow in all sorts of context, and certainly not limited to references to China or other Asian nations/ethnicities.
In fact, it's been so universal I never even made the connection or wondered about the etymology. Finding out that it's a loan word from Cantonese is something I learned due to this thread.
All your examples are false equivalences. The word "kowtow" is a perfect description of a relatively complicated ritual that didn't already have an English word for it (you could maybe substitute "placate" or "show deference" but these can have other meanings in different contexts). Words from other languages like "karaoke", "restaurant" and "prima donna" have always been incorporated into English when no specific substitute works well enough (of course this isn't specific to English, but it is a very English habit).
Your Mexican example would be using (I assume?) the Spanish of whatever word would work just as well in English, and I've personally used and seen people use words like "bruh" and "yo" with lots of different people. In fact, where I'm from "bruh" is a very typical "white" thing to say.
All your of your comment is intentionally stripping things of context in a pathetic attempt disarm a fair argument without addressing the actual substance of it.
Saying “kowtow”, “bruh”, “what’s good”. Not a problem.
Someone who never says “bruh” or “what’s good” suddenly talking like they’re extras in a Migos music video to their black coworker is not cool.
Saying kowtow, but only in reference to Asians and always using “appease” in other contexts, is not cool.
Yeah I know HN is mostly white guys who squirm at the idea of race and think “I don’t see color” is an ok thing to say, but if you’re not going to at least try and take someone's arguments for full value, even if you don’t agree, don’t even respond, it’s insulting otherwise.
I don't have an issue with the base argument, I agree with it. I'm saying the examples are false equivalences because in the context of the original comment, they are. There's nothing in the original comment that indicates the use of the word "only in reference to Asians" because you have a sample size of 1 (again, I've personally heard it used in non-Asian contexts too). Making an assumption about the intent of someone's comment doesn't fit my definition of a "valuable argument" outside of more context, but as I said I agree with the general issue with individuals using certain words only in certain racial contexts.
I'm not sure if you've picked up the main point of what I'm saying or are just performing some deflection of your own, but it stands nevertheless: you've got a reasonable argument that I get behind, just make your argument without using misleading examples.
Not sure why others seem to disagree, but kow-tow indeed conjures up fu manchu-esque images, a sort of comical or repugnant representation of groveling associated exclusively with Asian culture. Exactly as you say, it's not necessarily racist in intention of using the term as subservience, but racial nonetheless. Separately, the actual kau-tau seems to have meant something specific as a ritual of respect. Used here, its generalization to mean forced groveling or appeasement is strange, as it implies the person or entity doing it is a loser.
It's hard to compete against government sponsored monopolies inside China. There's also a huge nationalism sentiment brewing in China and distrust growing for western companies and nationals from other countries.
It's sort of hard to wrap your head around these concepts as a westerner, because we start form two different places of thinking; in China, the government is your way of life, as long as it doesn't interfere with your daily life. The constructs of intellectual property, property rights, etc aren't present
Purely as an outsider looking at the regular China tech posts with interest over the years, it feels like there's a common thread, where US tech giants look at the Chinese market and rub their hands with glee, expecting to simply place an office there and integrate as they do everywhere else, only to find an existing ecosystem they seemingly have no knowledge of - and instead of studying that ecosystem and improving their product globally they bow out when China doesn't seem to be as "easy" as first thought.
Obviously, this is a gross over-simplification of the situation, but it feels weird that FAANG-size tech companies seem to all be making the same mistakes by embedding their services into a packed marketplace and being arrogent enough to expect to beat pre-existing competition. Outsiders may claim (and rightfully so) that China has a bias towards Chinese companies, but this bias doesn't seem to be the reson why the likes of Amazon and Google fail in China.
I am so sad to see how the comments under this post manifest. People just blindly pointing fingers to the big evil Chinese government for the failure, without any evidence whatsoever. I get it, failures are hard. But you can face it and learn to be responsible for it. All grownups do that.
I think American are transitioning from a bunch of doers to a bunch of whiners.
Amazon's model has been a "central place for everything". Culturally, China seems to be more open to having ten million places to get their specific things they need. Having a central online store is not a big deal for them.
In online retail, shipping speed and selection are what entice customers. I'd argue that the UX and promotion landscape are moot past a certain point.
Fast shipping and selection comes down to infrastructure. China is spread out, this means each FC must carry more stock on average, and you need more FCs per person to reduce shipping time.
Markets like Japan and small EU countries are juicy targets for this reason (which is why you see so much investment there).
And then there's 'regulatory challenges'
Each FC requires large amount land, development, and employees. These types of projects require a high level of cooperation of the government to be worth the investment.
This doesn't pair well with a government that is notoriously unwelcoming to foreign business.
This is at least a more reasonable take on the matter than those pointing fingers at the big, evil Chinese government without any clue what they're talking about.
They are quitting the B2C e-commerce market, not the B2B market. B2C is an area where China is in many cases more advanced than the US, especially when it comes to mobile apps. US is more web app centric and China is more mobile app centric. China has really good apps like WeChat for which there doesn't exist an equivalent in the US.
Also it does look like Amazon in general is putting more resources into it's higher margin businesses (eg AWS and Echo) than e-commerce.
Should be obvious... Amazon has become a peddler of goods manufactured in China, at inflated prices. Why would they pay more for the things they can get cheaper locally?
They know the Chinese will steal every bit of IP/Technology they can, and then once they've extracted all the juice they'll create market conditions that make it impossible for the foreign company to remain successful.
China has been running this program on everyone since they started with the Communist/Open market concept. It's just amazing that companies still haven't caught on. The lure of big money blinds the greedy.
As a nation, isn't that the right strategy to survive and develop? Why China should always do the low end manufacture work? As a people, would you always do the handy work if you have chance to learn from others and do a white collar job?
This has nothing to do with communications or product development. China will not let a non-Chinese company ever gain top position in any sector. That's how the government works. And yes the article is bullshit because this same government won't allow any negative press about their actions either. These Pandaily journalists will have a very hard time if they actually wrote about the real environment there.
While the evidence in this case seems to be against this statement (Amazon indeed offered worse service than competitors) I think it is otherwise valid. Chinese are really driven to become the world's superpower number 1 and give no quarter to Western companies trying to establish themselves in China.
So the big dilemma is, do we let them? Or more precisely, do we as the outside world let Chinese stifle all the foreign companies in their own market while their own companies operate freely in those foreign countries? It smells really a lot of mercantilism, and the Chinese culture of copy-catting freely doesn't help. It seems like the Western countries in particular have become too soft for Chinese tactics, and are too afraid to act against China. This at least has been my perception.
Hasn't this been obvious for years? Like, centuries? No major power allows other nations, especially nations which are not close military allies, to dominate its economy. China acts in its own self-interest, as does...every other nation in the history of the planet which is able to. The U.K., the U.S., or any other major economic power, will not allow its economy to be dominated by companies from countries that it does not trust as a close military ally. Both the U.K. and the U.S. only became in favor of free trade once they were the dominant economic power of the world, and prior to that was protectionist. Japan and South Korea protected their economies as they grew, to the extent (given their size) that made sense to. If you're the size of Singapore or the Netherlands, of course, things are different, as you simply cannot do everything, however developed your economy. Also, the U.S. allows someone like the U.K. to have a much bigger presence, because of many cultural and military ties.
But the idea that China ever intended to continue to allow western companies to dominate their economy, once they were developed enough to do something about it, is naive. No nation, that can avoid that, allows it.
Schneider Electric has a fairly large presence in the US...to what I can imagine is a huge benefit to both Europe and the US. Bosch, VW (let’s forget the scandal for a minute)...
This goes beyond so much more than this particular article. The ‘western’ world is building a global civilization, and it seems like anyone is invited if you play by the rules. All of the China doves over the last 3 decades probably thought China would open up in that way and join the ‘developed’ world.
I mean, fuck, Samsung is a huge compnent of the US economy, isn’t it?
No, fuck China, and protectionism in general. They had (still have?) an invitation into the global civilization. It’s based on rules, that you have to follow. Of course there are criminals (hsbc, Libor, etc...) but overall it’s based on rules.
This ‘realpolitik’ that has taken over, where ‘yeah of course nations act in their own best interest’ is not the complete picture, because at some point, a nation’s self interest is in cooperation.
Well, there are certainly German companies operating in the US market, but:
1) Germany is a NATO ally, and the US has military bases in Germany, which is very different than the relations between China and the US
2) Germany does not have any possibility of dominating the US economy in the way that US companies could (if allowed) dominate the Chinese economy
South Korea, like Germany, has a military alliance with the US, and the US has military bases in South Korea. Again, there is also no real danger of South Korea dominating the US economy on the scale that the US could (if allowed) dominate the Chinese one.
Lastly, there are rules in the "global" economy, but those rules have mostly worked to the benefit of the countries that made them (see results in Latin America and Africa for what happens if you follow IMF and World Bank advice on opening up your economy). South Korea, Japan, and other "Asian tigers" mostly did NOT follow IMF/World Bank advice, and that's why it worked for them. China is basically doing the same thing Japan, South Korea, etc. did a couple decades ago.
This doesn't mean we shouldn't care, or even respond, but we shouldn't be surprised, or expect something different in the future.
Yeah, you play by rules, as long as it benefits you. Why does US so strongly advocate banning of Huawei devices, in the whole world? You say Huawei may have backdoors, but who don't? And Huawei may be the cleanest as it just "may", while the other competitors have a history of "do".
The slogan "America First" doesn't sound so globalistic. And playing by rules is definitely not before America, which is first.
They sell terminal, personal devices, which is not the same thing as building the 5G network. I think the Snowden revelations have made it perfectly clear that the western governments have been extensively monitoring network traffic/infrastructure since forever.
You still fail to see it, do you? Or maybe you're just too blinded by western mainstream propaganda, or even deliberately trumpeting the propaganda. I'm not sure.
The whole precondition and reason of all those other countries being allowed to join this so-called "global civilization" and play by the so-called "rules" is because America remains the undisputed No.1 in this set of rules. America pretty much controls every aspect of the social fabric of its allies and they can't live without their big brother and protector.
If you actually talk to some Japanese and Germans, or even French, you'd find out how much apathy and even antipathy towards this American hegemony they harbor. Particularly those who don't stand to benefit a lot from this situation. I recall particularly vividly a survey where the perceptions of Germans towards America are substantially worse than the perceptions the other way round.
For CCP, the national independence and sovereignty is always the top priority, not least due to the humiliations and pain suffered in the hands of the former colonial power.
Naturally, the consequence of the rise of of an independent China is that the American hegemony is under threat. And this is the reason why America has been so keen to act against China. This is understandable, as power transitions/struggles between two great powers have rarely occurred peacefully throughout the history.
But at least you should recognize this reality instead of trumpeting the "global civilization", "democracy" propaganda nonsense. If the US actually cared the least bit about civilization and democracy, would it have sent agents to topple so many democratically elected regimes around the world, just to install their own dictator puppets and let the people suffer in eternal poverty? Would it have fought so many senseless wars and killed so many civilians?
The aim of the US is to keep its hegemony and try to keep all the other nations in their "allocated" positions. It doesn't give a damn about whether the actual population of those nations improve their living conditions or anything like that.
Similarly, the so-called "doves" are not really concerned about China's growth, but rather have expected China to occupy a preallocated place, where it would perform the roles that benefit the West, but not threaten their dominance in key industries and sectors at all. "How nice it would have been for China to remain a cheap manufacturing hub instead of trying to become a technological superpower." Too bad. China is not willing to play the ball and harbors greater ambitions than that, which it has every right to do.
This is just how politics works. But at least see it and acknowledge it. If you can't even do that, you're not seeing through even the most simplistic mainstream propaganda, and that's tragic.
Well said. The mainstream propaganda is just way too prevalent. If people actually read a bit of history of their own countries they'd immediately find out how brutal the struggles between the western countries have been and how incredibly "protectionist" and hostile their own governments have been.
> Chinese culture of copy-catting freely doesn't help.
The problem with that, is that it's a vicious circle. Innovation is the foundation for future innovations. It builds on itself. It lays the groundwork and foundation for what comes next. By leapfrogging and cheating its way to the top (or near the top) they are sacrificing that crucial infrastructure for future discoveries and innovations.
China has to copy & steal IPs because it simply doesn't have the culture to compete. They're one of the least innovative countries on Earth, year after year. And the only way to change that is by allowing its citizens to think creatively, outside the box -- to be able to challenge authority. But China doesn't want that; they want conforming little worker bees who follow the party line.
> China has to copy & steal IPs because it simply doesn't have the culture to compete. They're one of the least innovative countries on Earth, year after year.
Funny thing, that's exactly what people used to say about Japan, and then about South Korea. (And the typical work environments in both countries do not exactly encourage creativity or challenging the status quo, either. So I'm not sure what difference that might make.)
I wonder if this comment is racist. China never was and is not the least innovative countries on Earth. The Chinese internet companies are micro-innovating at a speed no country in the world can compete.
Let's say this, the counterparts of Facebook and Twitter has already fallen or on its way to fall out of favor in China because people found more interesting ways to waste their time and find useless information. Soon, you will find Facebook and Twitter doing the same, and in that order.
Sites and apps surviving the Chinese market are the real winners, and those who cannot will fail in other countries too. That is the power of a large enough testbed.
It seems the parent is suggesting that we block Chinese companies from operating in the USA, basically tit-for-tat retribution. Based on "...while their own companies operate freely in those foreign countries"
This might be applicable for hardware sales, but for service companies (including ecommerce, search, ride hailing, all the big USA tech company niches) it's kind of a moot point. None of the big Chinese companies put any effort into working outside of China. In fact my biggest complaint is they don't do any internationalization at all, so if you don't read Chinese you basically can't use anything. To the extend that services even work outside of China they are mainly only used by Chinese people, see for example WeChat or Taobao or Baidu. So I'm not sure this line of action would have any effect.
If the parent instead meant blocking Americans from doing any business with China (as a manufacturer of smartphones, for example), that's likely to have much more downside to American companies and consumers than to China, so we'd be shooting ourselves in the foot.
But all these points are debatable, see all the back-and-forth about the tariffs/trade war. Some great economic write-ups on all sides.
Well it's a difficult problem, and tit-for-tat retribution could be the optimal action based on my little knowledge on game theory (https://ncase.me/trust/). Yet if things would go badly and the global economy go into turmoil, I think it would be notably worse for both.
Another problem I've noted is also the Chinese companies buying up Western companies and seemingly operating as Western, but actually being fully owned by the Chinese companies which might be even indirectly owned by the Chinese government. Volvo, Supercell, Nokia phones (HMD Global) comes to my mind. From what I learned Western companies can not similarly buy Chinese companies at least fully, and part-Chinese ownership is almost required for a company to become highly successful in China.
So my conclusion is that if foreign companies can't operate freely in China, why should Chinese companies be able to operate with much less restriction in those same countries. Especially if it yields a monetary benefit for the Chinese doing so. Doesn't seem smart. Would love to see some actual research on this.
That corporate ownership aspect is actually a good point. I'm not well-versed on the legal complexities of international ownership or the pros and cons of corporate governance in that situation, but it's definitely something worth looking into further.
On a related note, I find it frustrating how so much residential property in San Francisco is owned by Chinese investors/real estate moguls. I have no idea what the fallout would be to limiting the ability of international entities to own so much property here, but I imagine it would help with the sky-high rents. It's not a line of reasoning I've ever seen a good write-up on, so I would be curious to understand it better.
Individual actions to enforce norms often costs more than the individual infringements. Arresting, prosecuting and rehabilitating someone who commits property crime could cost many tens of thousands of dollars. It's worth it in the long-run, though, despite game-theoretic oversimplifications, because it reduces crime in the long run.
(Almost) everyone agrees that protectionist policies are directly harmful to America's economy. I wonder if people might be more willing to accept them as tools to encourage change in other countries behaviour if they were sold better, though, or sold by someone else.
Well that's exactly what Trump is doing with his trade war [1].
The goals are: 1) removing trade/current-account imbalance (which has improved on its own due to the massive spike in Chinese tourism [2]), 2) allowing more Western companies enter China without forced technology transfer or other "unfair" practices, 3) reducing the rampant intellectual property violations in China.
Amazon has severe product development issues for their goods marketplace, up here in Canada the wind is saying that Amazon's quality is always somewhat questionable with white-labeled resellers that are offering goods available through AliExpress or Wish but at a steep markup. Amazon has shifted from a company that sells highish quality goods of a wide variety to selling goods of random quality of that wide variety which simply can't compete with the markup they're placing on their products. Again, I only know Canada's market over the last few years, but Amazon doesn't really bring a lot to the table - concurrently their cloud services are pretty good... but becoming indistinguishable from their competitors and their price transparency and customer support is crap.
Amazon is the premier marketplace for counterfeits and relabelled crap from alibaba. I don’t know why anyone buys anything from there. I’m at the point where I’d rather buy most things from Walmart.
> China will not let a non-Chinese company ever gain top position in any sector.
I don't know about this. Starbucks, McDonalds, KFC, Boeing, Apple and many others are ahead of their Chinese peers in China. It sounds like you're just using a blanket statement from reading various online articles without even how it's out there.
I've been there, worked with people there, have friends there building businesses for decades. Have you been out there?
Companies are allowed to operate and grow, but they are tightly controlled. Apple has strong competition and has already trimmed prices and revenue targets. China just purchased 300 planes from Airbus instead of Boeing. McDonalds sold off 80% of its China operations to a Chinese stated-owned company years ago because it had trouble adapting its menu. KFC in China is owned by Yum China and headquartered in Shanghai.
The world is not some free-market paradise. Territorial rules are everywhere. You'll encounter them just to do business in local counties within a state like New York. China's government has incredible power and control and has far more impact than you might think.
>Apple has strong competition and has already trimmed prices and revenue targets.
How is that the government's fault?
>China just purchased 300 planes from Airbus instead of Boeing.
Airbus is European
>McDonalds sold off 80% of its China operations to a Chinese stated-owned company years ago because it had trouble adapting its menu.
Again why is McDs inability to serve the Chinese palate the fault of the government? Consumer tastes in food are far more determined by culture than government.
The rest of your statement is a non sequitur and strawman.
Apple's Chinese competitors are helped by the government. China does not have an aviation manufacturer to compete directly (yet) but it ensures that neither Boeing or Airbus get a significant lead over each other in their controlling market.
The parent poster claimed McDonalds was a successful example, however it only successful because it is now led by Chinese-state-owned agency so the real-estate (which is 99% of the value) is not foreign owned. Same with KFC.
What is non-sequitur? That governments exist and have different rules for their businesses and citizens?
1. Apple's competitor is cheaper...literally 40%-50% of its price, if you are talking about Xiaomi/Vivo/Oppo. Those are decent phones, not as premium but offer great experience.
2. > Boeing or Airbus get a significant lead over each other in their controlling market
Isn't that the smart thing to do? Government ALWAYS chooses multiple vendors, DARPA wants to use AWS as its sole cloud computing provider and it gets SUED.
What you seem to want to point out is, China has a very unique business environment and domestic market, where Western companies, if not going through intensive localization and adaptation, can't directly deploy its otherwise global operations in China easily. Yes, China needs to open more of its market, and under the current trade war, it needs to do that fast. However, that still won't mean that American companies should assumed be the winner, unless they have a competing edge, the locals just can't offer.
I really don't see this is a much problem here. China/Japan/Korea, those Asian countries have dynamic domestic economy, and those companies are competitive in their homeland.
The conversation has drifted. It's not about whether you see a problem. It's just how things are done in China where the government has total control over the market unlike many other countries and the US.
Amazon couldn't compete because it was not allowed to compete.
You're focusing on a word instead of the discussion.
China allows foreign companies to compete and grow as long as they follow their rules and are in non-critical markets. Amazon was in a critical market and had domestic competition so it was pressured until it left.
Aviation is a critical market so Boeing and Airbus are being carefully controlled to stay soft in favor of the upcoming (state-run) Comac C919 jetliners getting US certified. China is already selling these jets in Asia and they will be the used by all 3 major (state-run) Chinese airlines once ready, eventually pushing out Boeing and Airbus completely.
The original statement was "China will not let a non-Chinese company ever gain top position in any sector." The fact is that no chinese company has a better position than Boeing. There are no chinese company with better position than Louis Vuitton, Chanel etc. There are no chinese companies with more profits than Apple. Those are just a few examples but they prove that that it is possible for a non-Chinese company to get top position in a sector. You should restrict your statement to "Non chinese company can get a top position in China but there will be tight control"
Sure, given a lack of a domestic competitor, China will allow a foreign company to serve the market with tight control.
They don't really care about some luxury goods brands but they are investing heavily in critical sectors like aviation. They have a long road ahead but Comac (state-owned manufacturer) is already selling commercial aircraft to other countries.
So then what other US company such as KFC, Starbucks, Coach, Tiffany & Co., Estée Lauder and Michael Kors do differently so they allowed to compete and enjoy success in china ?
As I've said, anyone can compete and enjoy success in China. However you must follow their rules and there will be subtle to overt controls placed on your operations and growth if you ever come near risking their political positions or existing monopolies.
Restaurants are not strategically important, and believe me, China would be very happy to have more home-grown airplane manufacturing expertise, but right now it makes sense for that talent to be directed towards the war industry.
"This has nothing to do with communications or product development. "
And yet the users in this thread have repeatedly said that there are major product differences between Amazon and its Chinese competitors, where the alternatives offer much better value propositions to their customers.
In addition, Amazon is having trouble in many countries other than China.
Honestly, what? The US props up US corporations all the time... didn't Amazon just pay -$129M (as in, received free money) in taxes to the US government?
Comparing U.S government to the Chinese government here is ridiculous. The Chinese government has absolute and total control of everything within its borders. It could dissolve a company tomorrow if it didn't like it -- or do the reverse and allow it to operate at a loss in order to hurt foreign competitors. The U.S has laws against such practices while China actively engages in those behaviors.
The downvotes agree, but the parent comment didn't try to argue against an equal propping - they argued against any propping. The US has quite clearly propped up specific private business in the past - banks that failed to responsibly offer loans were bailed out, the auto industry has been bailed out, defense contractors only exist due to the immense amount of the total tax revenue that gets funneled to them.
Amazon has past the point where vertical integration questions should be raised and a break up should be considered for the public interest - not pursuing it for them (or Walmart, or Google, or many other too-large-to-fail corporations) is another form of assistance the government offers them.
The US is not a free market and participates in private industry subsidization both with and against the public interest but, I agree, it's no where near China's levels - to keep it from getting to those levels we need to acknowledge how bad it has already gotten.
Any corporation here can take advantage of tax rules. You can be a Chinese national starting a US company as a subsidiary of a Chinese company and do exactly the same thing.
In the best case that's a misunderstanding of the political situation in the US. As a reference, recall HQ2 where Amazon was negotiating to skirt property taxes for the next infinity years with the local government. All corporations technically have access to these, but regulatory capture is strong in the US and market incumbents tend to have a lot of weight to throw around to make sure they get favorable tax loopholes and exemptions. Access to these sorts of loopholes is also probably influenced by social network strength which a lot of chinese nationals (especially ones openly representing nationalized companies or the subsidiaries thereof) would find difficult to establish.
Those are opposite things. True, US corporations are independent and can gain influence over parts of the government. In China, the government controls the corporations.
Chinese nationals are the largest foreign group of investors in US commercial and residential real estate. They have plenty of access. The success and scale of the Belt and Road Initiative directly shows just how vast the control extends.
Is this separate from US investment abroad - historically, when the US was at it's peak, there were governments in central and south america that were overthrown to make sure fruit corporations received favorable government treatment. In the modern world we're seeing the influence of the US waning, but lots of countries have "voluntarily signed on" to buying the boondoggle that is the F-35 even after all of the negative press and the US (or US organizations) still have significant political sway in eastern africa, though their losing it.
In China the government appears to clearly control the corporations (while there are some highly influential corporations that, through their economic power, have essentially become moves and shakers in the government) in America corporations control the government (while there are a lot of former politicians who end up sneaking off into highly paid do-nothing positions for their help during their tenure in elected office). These things are different, and America is absolutely a more free place, but it isn't an absolutely free place.
We're not disagreeing on whether America is a free market. No country is. Your post on taxes was perhaps a bad example but regardless the topic here is about Amazon leaving China. The reason as I see it is not because they were a poor competitor but rather because they were not allowed to compete.
Assuming an average 8.00% sales tax on Amazon revenue 232.9 billion USD, Amazon still paid $18-19B in taxes. That's significant. And EU VATs are usually higher than 8.00%.
The theoretical response of Supply & Demand curves to taxes that we learned in macro don't hold as instantaneous or ever fully realized in the real world. Humans simply aren't rational actors.
"That's how the government works". Calm down. Huawei has been shut out of America (and many other allies) because of allegations of ties to the Chinese government. Amazon is on the cusp of winning a $10B contract for the Pentagon. So, same thing. America and China are now explicitly strategic competitors, both governments have been saying that for the past 2 years. It's about competition, not about totalitarian repression.
I'm perfectly calm. The US government is nowhere near as protectionist and controlling as China's. This is indisputable. The current administration is starting to change policies to at least counter some of the control China extends beyond its borders.
Totalitarian control has an effect on competition. Those cannot be independent.
Amazon will never get greater market share because China's govt won't let them.
Microsoft did not leave Japan, they are in fact expanding Xbox Asia and have added an Asian team to the Global Gaming Partnership and Development (GDDP) division: https://www.google.com/search?q=xbox+asia+expanding
It seems to me that in these kinds of topics, someone always tries to pin the majority of the blame on Chinese protectionism. While that's certainly a factor, it seems Amazon has not been able to capture anywhere near the market share foreign companies operating in China are regularly allowed to capture, (before feeling the pressure).
So sometimes, (like in this case, it looks like), it may just really be the case of a business not being able to adopt to the different expectations of Chinese consumers.
I was just reading the other day about why U.S. car makers struggle in Japan and that for example domestic car makers there offer the ability to customize the car to an extent U.S. companies can't compete with.
It's likely that Amazon faced enough competition naturally, given its low market share.
I think part of the problem a lot of the time, is Asia gets bundled together... I mean Indian culture by itself is varied, let alone Japan, Taiwan, Singapore, China and other Asian countries. Much more so than even intra-US variances between D and R. You need businesses that understand this, or need to stay in more localized regions and expand as one's understanding expands.
Culture is varied and in many ways everything. Competition is also biased and fierce. At least that's my understanding of things (as a white guy born and remaining in the SW USA).
I do find it funny that Amazon is pivoting to "high quality cross-border sales" considering that into the U.S. seems to be low quality, high markup sales (including high levels of counterfeits) with no end in sight.
I don't think the Chinese government had any role in destroying Amazon's business. In fact we can find counter-examples to your theory as there are foreign companies very successful in China: https://www.1421.consulting/2018/06/successful-foreign-compa...
The Chinese govt didn't destroy anything, they just won't let them compete. This is not a secret conspiracy, it's public knowledge.
Those counterexamples are just companies operating in China, of which there are many. There's no problem unless they try to become major players which will never happen. Ikea is the biggest and has recently come under pressure for simply suggesting that Taiwan is a separate country through packaging. This is tightly controlled market, you don't just wander in and do whatever you want.
Though the end result is more or less something similar you are over simplifying the situation. IMO usually there are two major reasons that makes foreign companies hard to compete with locals:
* Excessive regulations and sometimes special rules for foreign companies. But e-commerce is usually not the worst sector for this.
* "Expertise" on how to deal with local laws. It is no secret local laws are usually selectively applied. Local companies have a lot more flexibility than foreign companies and they can do a lot of things that could create prohibitive legal liabilities for foreign companies if they even want to follow. For example, low wages and unhealthy work environments, unlawful marketing tactics, bribery and corruption etc.
I would argue the latter is the usual competitive advantages local companies have.
I cannot believe this is the top comment. What you say is totally anecdotal. Do you have any evidence that Chinese government went out stopping Amazon from succeeding in China?
> Liu also bought items on Amazon.cn only to find disappointment, as it took him two days to receive them. “How could they call that two-day delivery,” Liu said.
Well, I guess he counted two-day delivery to include the day he ordered, if it’s so then on the third day things delivered. Btw, those Chinese giants offer same day or second day delivery for their paid prime like customers. JD offers same day delivery in cities like Beijing if ordered before 11am, and second day delivery if not. In China logistics is a big thing for every e-comm company. Even sam’s club in China offers free 2hour delivery on certain items.
I was just about to re-quote this. If you have lived in China before you would understand and agree that two days (the Amazon Prime gold standard) is considered too slow in China.
But if you're lived in China and used JD or other delivery companies, you have to agree that the delivery fee is insanely cheap for same-day delivery, and that this gig work seems on borrowed time, the costs are going to increase, and the question is, will JD be able to keep this up?
Amazon is using proven multi-decade logistics companies for delivery, so it's pretty certain their internal cost structures are rational.
How much are the JD trucks and delivery guys being paid? How above board is JD's finances? What are they getting from the governments? Perhaps it's just another WebVAN.
These things are never quite clear in China, transparency and public audits are not present.
The density only partially helps, because there is still an overhead in even a single delivery that has to be paid. I'll give you an example, 饿了吗 will deliver food for 5-10 RMBdelivery fee in Shanghai. I would often order say, 生煎包 for 8 RMB and pay 5RMB delivery. A guy on a delivery bike would take like 15-30 minutes to deliver, and I often noticed they only delivered one order in my condo (his bike had nothing else in the basket), and just getting from the street to my condo's door, ringing the phone, and having me buzz him up the elevator would consume 5-10 minutes of his time getting in/out of the place and back to his next delivery.
Shanghai minimum wage is 2500 RMB/mo. So in order to make minimum wage, this guy would need to make 500 orders in 30 days, or 16 deliveries per day. In an 8 hour day, could he pick up and make 16 deliveries? Sure, but it's tight, and obviously at some point, they have to pay the delivery guys more.
And they have, but in order for O2O players to pay more to the delivery people, they've ended up charging more to the restaurants, and so the restaurants have then ended up raising the prices on the menus displayed.
So this indicates that the current O2O system in China wasn't stable. Despite massive revenues, the heavy competition, discounts, and artificially low introductory fees, and ease of switching, doesn't give me confidence their current structure will work.
And 饿了吗‘s logistics seem pretty chaotic to me and no different than Postmates or Doordash in the US. I rarely saw delivery bikes loaded down with multiple orders, because 15-30 minute delivery windows pretty much dictate a point-to-point delivery, rather than a hub and spokes model.
The lunch delivery market is not what I meant, but more conventional ecommerce. I know for sure that in that market, companies do make break even.
In Russia, we had same day delivery even in very first eCommerce site back in nineties, and even e-groceries. That was just much a much smaller market, and the fact that 90% of country's economy was in Moscow back then was helping.
China today is not much different with 5 megacities making 90% of eCommerce trade volume.
The source for that quote is in mandarin, so maybe something got lost in translation.
Edit: My mandarin is elementary school level, but there's a similar quote in the source article that sounds like "therefore they call it 2 day delivery"
It doesn't prevent American companies from handing over all of their tech IP to China (the one that wasn't already stolen) and attempt to do their bidding at every step.
So it's win-win for China -- there's another (American firm) sucker born every minute looking to "enter the huge Chinese market", and the Chinese gov is taking full advantage of that (ultimately) hopeless dream.
Which is still a better starting point than nothing.
On one hand it sucks that China is abusing its position in the global market, but on the other hand I am really not shedding any tears for greedy corporate America getting screwed for once.
Sadly, it's not just greedy "corpo 'merka" getting screwed. Plenty of scrappy software startups with stars in their eyes have services and products that would really improve Chinese lives, but can't or won't operate in-country because it is entirely too much risk.
my impression is that this is exactly what China wants. what do they have to gain from allowing american companies into their market without some hurdles? it is far more beneficial to china to encourage local business development.
Seems like you haven’t read the article, have you? What Chinese leadership are you talking about? Just read the comments here, Amazon is lagging behind JD and others
