Amazon plans to shut its online store in China that allows shoppers to buy from local sellers as it downsizes operations in the country.

The firm said it would no longer run the domestic marketplace from July, but Chinese shoppers will still be able to order goods from Amazon’s global store.

It will also continue to operate its cloud business in China.

The retail retreat comes as Amazon faces tough competition from local rivals Alibaba and JD.com.

Reuters first reported Amazon’s plans to close its domestic marketplace in China by mid-July to focus on more lucrative businesses selling overseas goods and cloud services. Amazon’s profitable cloud computing division hosts huge swathes of the corporate world on its data servers.

A spokesperson for the company said in a statement that it was “working closely with our sellers to ensure a smooth transition and to continue to deliver the best customer experience possible”.

Consumers accessing Amazon Chinese web portal, Amazon.cn, after 18 July will see a selection of goods from its global store, Bloomberg reported.

Amazon bought Joyo.com, a Chinese books, music and video retailer, for $75m (£57.4m) in 2004. It rebranded the company as Amazon.cn in 2007.

But it has struggled to compete with dominant players JD.com and Alibaba’s Tmall marketplace in China.

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The shift away from the world’s second largest economy comes as the company pours huge investment into India.

Amazon has committed to spending $5.5bn on e-commerce in India, where it competes with local rival Flipkart.

Last year, it launched a Hindi version of its mobile website and smartphone app in an attempt to attract millions of new customers in the country.