Why did large western MNEs fail in China - A case study of Amazon's partial exit of the Chinese market
Authors
An, Yixuan ; Zhu, Youjing
Term
4. Term
Publication year
2021
Abstract
Denne afhandling undersøger, hvorfor store vestlige multinationale virksomheder ofte mislykkes i Kina, via et forklarende casestudie af Amazons delvise exit fra den lokale e-handelsforretning i 2019. Med udgangspunkt i OLI-paradigmet, institutionel teori samt litteratur om internationalt markedsexit og fejlslagne satsninger i vækstøkonomier kombinerer studiet sekundære kilder med branche- og konkurrentanalyser samt en forbrugerrettet drøftelse. Analysen dækker fem dimensioner: Amazons drift og organisationsopbygning, landespecifikke institutionelle barrierer (regulering, kultur og sprog), særlige træk ved Kinas e-handelsindustri, de førende hjemlige konkurrenters kompetencer og kinesiske forbrugeres opfattelser. Beskrivende data viser, at Amazons markedsandel toppede omkring 15,4% i 2008 og faldt til under 1% i 2018, før lukningen af den lokale markedsplads. Resultaterne peger på, at utilstrækkelige eller svagt tilpassede ejerskabsfordele, udfordrende og hurtigt skiftende locationspecifikke forhold samt interne valgs konsekvenser tilsammen undergravede Amazons position – en slags omvendt læsning af OLI, som kan forklare forløbet. Afhandlingen giver ledelsesmæssige implikationer for vestlige virksomheder: undgå copy-paste-strategier, invester i grundig lokal markedsindsigt, sæt kinesiske forbrugeres behov i centrum, og positioner differentierende kompetencer i et hårdt konkurrencefelt. Der foreslås desuden fremtidig forskning med kvantitativ vurdering af faktorer og interviews med nøgleaktører for at styrke pålideligheden.
This thesis examines why major Western multinationals often struggle in China through an explanatory case study of Amazon’s 2019 partial exit from the local e-commerce market. Drawing on the OLI eclectic paradigm, institutional theory, and literature on international market exit and failure in emerging economies, the study triangulates secondary sources with industry and competitor analyses and a consumer-focused discussion. It analyzes five dimensions: Amazon’s operations and organizational setup, country-level institutional barriers (regulation, culture, and language), features of China’s e-commerce industry, the capabilities of leading domestic rivals, and Chinese consumers’ perceptions. Descriptive evidence shows Amazon’s market share peaking around 15.4% in 2008 and falling below 1% by 2018, preceding the shutdown of its domestic marketplace. The findings indicate that insufficient or poorly adapted ownership advantages, challenging and fast-changing location-specific conditions, and the consequences of internalization choices jointly undermined Amazon’s position—a reverse reading of OLI that helps explain the outcome. The thesis offers managerial implications for Western entrants: avoid copy-and-paste strategies, invest in deep local market research, prioritize Chinese consumer needs, and clearly position distinctive capabilities amid intense competition. It also outlines future research avenues, including quantitative assessment of factors and interviews with key decision-makers to enhance reliability.
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