International company management necessitates management in a variety of nations with

varying socio-cultural and political-legal settings. In many situations, these disparities present
substantial barriers to international company management. Many multinational corporations
(MNCs) have been hampered by socio-cultural or political-legal hurdles, resulting in failure
or lower-than-expected income while operating in a new market. So, in this part, I will
highlight the causes for the company's foreign business challenges, notably Amazon's
situation in China, and make recommendations to assist them in overcoming such difficulties.

According to iResearch analyst Choi Chun, a Chinese research firm, Amazon has been
extremely successful from its inception, acquiring more than 15% of the market share in
2011-2012. However, according to Analysys, a Chinese market research organization,
Amazon's market share in China has dropped without a stop, to less than 1%.

Source: Statista Research Department, 2019

Amazon.cn used to fascinate Chinese customers because of its position and reputation built
on legal items and thorough testing, while local competitors such as Alibaba are still
grappling with the battle against counterfeit goods present on a large scale on its platform.
However, Chinese e-commerce firms have taken strong efforts to tackle counterfeit goods,
resulting in Amazon's competitive position has weakened greatly. Counterfeit items were a
general concern for the market, in which Amazon originally had great credibility; but, as
competitors got more adept at weeding out fakes, Amazon's advantage faded. And, in April
of 2019, Amazon formally stated that the trading floor on Amazon.cn will cease operations in
July. As a result, Amazon will no longer sell products from local companies and will instead
focus on cross-border sales (importing goods from other countries) to Chinese clients.
However, the departure of Amazon does not even make the Chinese community or netizens
feel sad, even though this is an e-commerce "giant" of the world. So, what is the reason for
Amazon's failure in this billion-people market?

The primary reason is because of differences in consumer culture. Culture is the fundamental
and primary root that governs human behavior in general and consumer behavior in
particular. It provides the platform for building consumer culture, and the manner in which it
is produced and consumed is a manifestation of culture. Culture has a tremendous impact on
how we dress, consume, evaluate the worth of products, express ourselves via consumption,
and so on, and all of these consumer activities carry cultural significance. As a result,
comprehending a country's consumer culture has a substantial influence on a company's
performance in that country. Unfortunately, Amazon is unable to provide this feature.

Chinese consumers assume that Amazon made a mistake in its customer acquisition approach
and that the company refuses to grasp the behavior of Chinese consumers while purchasing
items. Amazon invested billions of dollars to create 15 fulfillment facilities, manage much of
its own inventory, and build its own infrastructure, as it had done in other areas where it was
successful. While Amazon expanded its logistics footprint without increasing revenues, its
fiercest competitor, Alibaba, captured the majority of the market by hosting "an array of
smaller vendors and made use of local delivery companies to help it offer lower prices,"
eventually pushing Amazon out of the market because Amazon was unable to offer the same
product range with speedy deliveries, it was still lagging behind with long 2-day-deliveries.
Meanwhile, the need for quick satisfaction is a major feature of Chinese consumers. When
they see a product, they want it right away. They expect delivery within two hours or half a
day; just 22% of the Chinese new generation is pleased with next-day delivery.

Because of the advent of social media, instant gratification has become a key component of
Chinese consumer behavior, leading to an increase in impulse purchases. Furthermore,
Chinese people have a propensity of buying items cheaply and seeking to take advantage of
several incentives. Amazon, on the other hand, did not fulfill this requirement. It cannot
compete with competitors who provide low-cost delivery, and most of it is free, with no
minimum order requirements. Meanwhile, to enjoy advantageous delivery prices, Amazon
consumers must place a minimum purchase of 59 yuan to 200 yuan ($8.79 to $29.81),
depending on whether the item is Prime-eligible or not.

This country's consumers also have a tendency of trusting in advertising. Meanwhile,

Amazon largely adheres to the conventional sales technique used in the US market, namely,
less advertising. Amazon is likewise less passionate about promoting this feature in terms of
marketing approach. In contrast, on November 11, also known as Singles Day in China,
Alibaba and JD both launch massive advertising and promotions. This, of course, causes
Amazon to lose momentum in China because it is less visible to users when compared to
aggressively advertising e-commerce sites like Taobao and JD.com.

Amazon's mobile app design, on the other hand, trails behind that of its Chinese competitors,
posing an obstacle to success in the country. In China, mobile is extremely significant - 84
percent of digital purchases were done via mobile phones in 2017, and this number is
predicted to rise in the future. Amazon's app, however, appears to be falling short in China
since it is boring and barren, whereas competitors' applications are more colorful and festive,
which may appeal to Chinese consumers.

Amazon's downfall is also due to Chinese strict legal controls in place to safeguard domestic
companies. Instead of allowing foreigners to invest in technological enterprises, the
government prefers to encourage domestic industries, as seen by the blocking of Google and
Facebook websites. In the case of Amazon, it must also compete with China's most
competitive Giant, Alibaba, which owns several websites such as Taobao.com, 1688.com,
aliexpress.com, Tmall.com, JD.com, and many more.

Aside from the obvious obstacles of the Chinese market, such as powerful rivals and a
stringent regulatory environment, one of Amazon's core strategic weaknesses was its lack of
faith in local management. The absence of a trusted decision-making body on-site in a fast
changing environment, according to JD.com CEO Richard Liu, was always going to be
Amazon's downfall.

As can be observed, Western technology businesses face serious barriers in approaching the
billion-person market due to cultural differences. Nevertheless, Chinese consumers are not
unconditionally devoted to homegrown products. In fact, according to a recent poll, more
than 85 percent of Chinese netizens prefer Google to the search engine Baidu, and they
expect that Google will return to this market soon. Therefore, even if it has pulled its e-
commerce site, Amazon still has a commerce possibility since China's cross-border e-
commerce market is not as unified as domestic e-commerce. Consumers frequently use a
variety of platforms to acquire international items. As a result, if additional measures are
implemented in time, Amazon's cross-border e-commerce market will remain highly
competitive. 
So, in terms of suggestions, Amazon cannot operate in China's market since it lacks a
knowledge of Chinese culture and nature. To succeed in doing business abroad, it is
necessary to consider more than only product quality, technology, and pricing; nevertheless,
intercultural communication is the most important aspect. As a result, the company must
obtain their insights on not just Chinese people's behavior but also cross-cultural disparities.
Furthermore, they should implement a mobile-first strategy, remodel their e-commerce sites
to be more appealing with advanced mobile capabilities, and provide a smooth shopping and
checkout experience solely through mobile applications.
Another idea is to integrate social media. In China, e-commerce is pervasively social. Unlike
in the United States, where Amazon and Facebook are largely different entities, Chinese e-
commerce is inextricably tied to social media platforms like as Weibo and WeChat. Because
consumerism is new in China, people rely on product evaluations and word-of-mouth
recommendations from trustworthy sources on social media to make their decisions. As a
result, Amazon may use social media as a user-generated review and suggestion system.
Thereby,  customers may assess the accuracy of product descriptions, the speed with which
they are delivered, and their satisfaction with customer support.
My final point is about the growth of "key opinion leaders", or KOLs, in China. They are
very prominent persons with enormous numbers of followers ranging from thousands to
millions, such as bloggers and celebrities. Well-known companies, such as Gucci and Louis
Vuitton, have had enormous success using KOLs. Amazon may explore learning to use the
power of KOLs to interact with their consumer base and develop loyalty in order to thrive in
a highly competitive industry.
In conclusion, Amazon's failure to see the necessity of localization for essentially the
majority of its operations, spanning from its items to the delivery speed and customer contact,
along with intense competition, forced the company to forgo its Chinese e-commerce goals.
The only components that are still feasible are its cloud services, Kindle, and cross-border e-
commerce. Despite being subject to a distinct set of operations and problems, Amazon still
enjoys cross-border benefits, such as excellent items from narrower product ranges that
appeal to a more wealthy demographic willing to tolerate longer delivery periods. The critical
thing is that they must learn from their failure in China and adapt their business model to the
areas they wish to pursue in the future.