Online retailers go deeper in tech race amid Amazon's China retreat

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The e-commerce race is heating up in China as Amazon is set to shut down its China marketplace in July. That means Amazon customers in the country will no longer be able to buy goods from the platform's Chinese merchants.

The company first entered the Chinese market 15 years ago and struggled amid fierce competition with Chinese domestic e-commerce giants like Alibaba and JD.com. Intense domestic competition and the lack of brand awareness leave Amazon struggling in adapting to local consumer behaviors and mobile trends.

"For any e-commerce, or any multinational companies, (if) they want to enter Chinese market, once again, you need to understand the local differences, and you need to focus on what customer (want), they want international brand and reason behind it," said Kitty Fok, managing director of International Data Corporation (IDC) China.

On top of Amazon's failures in adapting to local business models, another lesson for e-tailers is to focus on investing in better consumer technology ahead of rivals. Fok cited the blockchain is the priority technology to bring up the trust of the product. That's a winning factor in the China market where consumer trust is low thanks to counterfeit products.

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"Blockchain, for example, it is one of the things which should be in place to make them different, that you can build confidence for the local customers, the quality of products and the product originality. So the whole product chain is important and I think there (are) some other things like robotics to help for the delivery services," she said.

Fok pointed out the Amazon Web Services (AWS) is still a strong player in terms of public cloud services in China. AWS offers a broad set of global cloud-based products including computing, storage, databases and analytics.

"In our research for 2018, AWS placed fourth. In fact, their market share increase from last year, so they are still a very strong technology company in China, they serve different parts of customers. Again, a lot of people use AWS cloud services because they want to get global," she added.

Amazon is likely to face similar challenges in India as in China, where the population density is also high and cheaper and faster distribution solutions pan out. That means the lack of will to localize or partner up, is bound to lead to less than one percent market share in a major e-commerce market.

(CGTN's Xia Cheng also contributed to this story.)