As China continues to be a formidable frontier for Western tech giants, Amazon’s Appstore in China is the latest casualty, revealing the complex challenges foreign firms face in the world’s largest internet market. This move comes following Amazon’s ongoing retreat from China, punctuated by last year’s closure of its Kindle e-book service in the country. In contrast, Microsoft’s Bing has recently risen to the top of China’s search engine market, a testament to the potential success of navigating local regulations.
Amazon’s Appstore was launched globally in 2011 and remained accessible without a VPN in mainland China, though some US apps, such as Facebook and Twitter, were not available. However, starting from June 30 this year, domestic customers will no longer be able to buy new publications, but they can still download purchased volumes until June 30 next year, according to a notice on the company’s site.
This strategic move from Amazon mirrors Microsoft’s LinkedIn decision to close its China-based app after less than two years, ending its social media presence in the country. Amazon’s retreat from the Chinese market highlights the significant challenges foreign tech firms face navigating local rules and competition from domestic giants.
Since its entry into China in 2004 through a $75 million acquisition of local retailer Joyo.com, Amazon has struggled to find its footing, particularly with its e-commerce and cloud operations. As of 2022, Amazon was the 12th most popular e-commerce platform in China, trailing far behind local behemoths like Taobao, JD.com, and Douyin. When it comes to cloud services, Amazon Web Services (AWS) ranks fifth, with a market share of just 8.6%, dwarfed by Alibaba and Huawei’s 31.9% and 12.1% respectively.
Despite these challenges, there is evidence that foreign tech companies can find success in China’s market. The recent success of Microsoft’s Bing provides a powerful case in point. Bing has seized the leading position in China’s desktop search engine market, achieving an unprecedented market share of 37.4% in April 2023, surpassing Baidu.
The strategy of Bing provides an alternative approach to China’s market. Microsoft’s success has been attributed to its compliance with Chinese regulations and censorship policies, in contrast to Google’s departure from the Chinese market in 2010 over concerns around censorship and human rights.
Moreover, Microsoft’s commitment to localizing Bing for the Chinese market and aligning with the government’s digital transformation initiatives made it an attractive choice. Microsoft’s enterprise solutions, including Bing, are gaining popularity across corporations and government institutions in China.
While Amazon’s closure of its Appstore in China signals a retreat, Microsoft’s Bing shows that strategic navigation of local rules and regulations can pave the way for success in China’s vast internet market. The contrast in outcomes between these two tech giants underscores the complexity and dynamism of the Chinese market, as well as the potential rewards for those able to successfully adapt.