Other local players that more closely followed Amazon’s model, like JD.com, invested more heavily in logistics and outcompeted the American company, which some argued was distracted by its presence in markets across the world.
In recent years, Amazon has focused more on offering cloud services and its Kindle devices instead of its core e-commerce business in China. Those have struggled under the onus of Beijing’s control.
“There is no other region that has such a dominant competitor and regulatory environment,” said Simeon Siegel, a retail analyst at Instinet, an equity research firm. “You have to wonder if Amazon gave up on China earlier than this announcement,” he said, given how Amazon barely talks about its Chinese business as opposed to other growing economies like India.
Some brands and retailers, like Starbucks or Nike, have found success in China, which has become one of their most important markets. “Nike as a brand may drive more revenue in China than Amazon does,” Mr. Siegel said.
Amazon’s chief rival in the United States, Walmart, has been expanding its business in China, particularly through a partnership with JD.com.
Walmart and its Sam’s Club unit sell on JD.com’s e-commerce sites, giving the American retailer vast access to Chinese consumers. The two companies have also taken steps to integrate their inventories so that the companies can more quickly deliver products to customers shopping on JD.com.
Walmart also operates hundreds of brick-and-mortar stores across China. The company recently opened a “smart supermarket” that can offer home delivery in less than an hour.
Chinese consumers will still be able to buy content like books for Kindles at Amazon.cn, and the company said it would continue other businesses in China, including cloud computing and the services it provides a growing number of Chinese brands that sell directly to Amazon consumers in the United States and elsewhere.