Amazon uses the “Buy Box”(the box on the right side of the product page where buyers can click “Add to Cart” or “Buy Now”), a complex algorithm, to help the buyer select the best option on its site. But Chinese sellers found the Buy Box concept complicated and inaccessible, and so they chose instead to sell on local ecommerce platforms without such restrictive systems, such as Taobao or JD.com. This ultimately limited Amazon’s ability to attract sellers (and in turn, buyers) in the Chinese market.

Richard Liu, the founder of JD.COM, initiated price wars to draw in customers at the expense of margins. Other ecommerce players including Alibaba all responded with deep discounts of their own. Alibaba’s Jack Ma even created a shopping festival the Singles’ Day, on which he offered large discounts and promotions to attract new customers. Amazon encountered unprecedented attack.

Amazon’s strong logistics network led it believe that no one could match its ability to make speedy deliveries. Yet JD, by building its own logistic network and delivery team, as well as approaching distribution differently, figured out how to do just that.