Macy's, the US department store chain, announced recently that it is delaying plans to expand its online sales operation in China.

The company had previously said it would start selling its own-brand products via local partner VIPStore this spring. Last year, Macy's invested $15 million in VIPStore, which focuses on discounted fashion products.

In its announcement, Macy's stressed that it hadn't given up on China and wasn't concerned about the macro economy, but rather that it wanted to learn more about Chinese consumers and the market before committing further.

It's a sound decision. China's e-commerce market is still experiencing phenomenal growth, and is expected to overtake the US this year. However, while sales are booming, profit margins for retailers are narrow, thanks to the prevalence of irrational discounting strategies aimed at grabbing market share. At the same time, changes such as an increasingly discerning and confident consumer class and the growing importance of mobile in e-commerce mean getting into the sector is very challenging. Especially so for an overseas operator unfamiliar with the market.

This goes for Macy's as well. In the US it is doing well online, and posting impressive growth in its general sales. However, this performance is due to a strategy that simply won't work in China.

Firstly, Macy's is a well-embedded brand in the US. This is thanks to its long history and activities such as its famous sponsorship of the Thanksgiving Day parade in New York City.

Then there's its 800-strong network of stores across the US. This has been key to Macy's recent run of success. Over the past four years or so, it has made a concerted effort to integrate its offline and online offerings. Store staff are trained to offer customers products from the company's website, even if they are not available in that particular store. The company has also tailored the offerings of individual stores based on local factors and preferences.

In China, Macy's lacks both of these important advantages - brand awareness and a network of stores.

Building a sizable brick-and-mortar network is out of the question. It could aim for a smaller network in selected high-end locations, but even that is risky. An example here would be UK chain Marks & Spencer, which has a similar market position. Recent reports indicate that it may be falling short of its sales targets by as much as 30 percent at its 14 stores in China.

Partnering with a local Chinese e-commerce player makes sense. However, VIPStore is a strange choice. It is a very small player in terms of market share - holding far below 1 percent - and lacks brand awareness.

A better strategy for Macy's would be to open an online store on a large platform such as Tmall.

At the same time, it would do well to offer its branded products under the Macy's name, rather than the bewildering range of own brands it currently offers in its US stores. This way, it can build up its China experience and exposure.

The author is a freelance writer.

adam.skuse@yahoo.com