Author丨Ou Xue
Editor丨Liang Zhongrong
Source丨Xinhua News Agency
On June 26, some sellers reported that Amazon held a closed-door meeting in Shenzhen to introduce its newly launched blockbuster project - "low-cost store" to sellers.
"New low-cost store, sent straight from China by Amazon!"
According to the on-site pictures revealed by the seller, the project is dedicated to providing customers with white-label low-cost fashion, home and lifestyle products, which will be fulfilled and delivered by Amazon's warehouses in China, and the goods are expected to be delivered directly to customers within 9-11 days.
Amazon, which has always been known for its "quality", has previously cracked down on "vicious competition at low prices". This time, in Amazon's latest chess game, "low price" has become the key word.
What do Chinese sellers think about this? How will the market perceive it?
(Scene map circulating on the Internet)
Attract Chinese sellers to the market
In fact, Amazon's move into the low-price market has long been revealed.
On December 7 last year, Amazon announced that it would significantly reduce the fees for cheap clothing sellers starting in January 2024.
As soon as the news came out, the market reacted enthusiastically. Industry analysts generally believe that this strategy may be a prelude to Amazon's preparation for fierce competition with SHEIN and Temu, which are known for their price advantages.
Entering 2024, Amazon has taken a bigger step forward in implementing a low-price strategy.
On April 8, Amazon launched the Bazaar e-commerce platform in India, focusing on providing low-cost unbranded fashion and lifestyle products, which is now open to sellers, requiring the price of goods to be no more than 600 rupees, mainly covering clothing, watches, shoes, jewelry and luggage.
On April 16, Amazon announced that it would reduce sales fees for low-priced clothing products in 11 major marketplaces around the world from May 15, involving Canada, Japan, the United Kingdom, Germany, the Netherlands, Belgium, France, Italy, Spain, Poland and Sweden. This is a further action following the same measures taken at the US site in January.
Perhaps Bazaar's test of the waters has been effective, and Amazon has officially shifted the focus of low-price competition to Chinese sellers this time.
According to the sellers who participated in the scene, Amazon's low-price store is currently open by internal invitation only, and plans to launch the warehousing of goods in the fall of 2024 and open registration this summer.
In addition, the low-priced store will exist as a sub-mall of the Amazon main site, and will share the back-end system with the main site and be managed through the site switching function. The performance appraisal of low-priced stores is independent of the main site and does not support co-selling.
Regarding product selection, low-priced stores are mainly for unbranded (white label) products, and the product link does not display the brand name, while the product itself can choose whether to display the brand or not. When choosing products, sellers should give priority to products that are cheap, lightweight, and safe, and the specific requirement is that the selling price does not exceed $20.
It is worth noting that in terms of operating rights, sellers of low-priced stores will have the right to select, price and participate in activities, but excluding advertising.
Sellers have mixed opinions on this. Some people believe that Amazon takes the initiative to start a "price war", which will further compress the profit margins of sellers. There are also those who believe that the trend of low prices is irreversible, which provides more opportunities for sellers to seize the low-price market.
Forced to get caught up in the bargain war?
When Amazon announced a significant reduction in the cost of cheap clothing sellers, the 21st Century Business Herald reporter asked it whether it intended to strengthen its competitiveness in the downward market.
At that time, Peng Jiaqi, vice president of Amazon China and head of product and seller education in the Asia-Pacific region of Amazon Global Selling, responded: "Amazon's purpose is to provide customers with a wider range of products, including low-cost products. ”
In addition, Peng Jiaqi further revealed that in addition to the commission adjustment for clothing, in the FBA fee, sellers can also continue to enjoy an additional $0.77 per item delivery fee discount for items priced below $10.
"This series of adjustments hopes to bring more opportunities for the development of low-priced products to sellers and consumers." Peng Jiaqi said.
It can be seen that Amazon's idea of participating in the low price war has been clear.
The rapid development of cross-border e-commerce is reshaping the platform competition landscape. According to the data of the network economic and social enterprise database, Amazon still occupies the leading position in the industry and ranks firmly in the first echelon. Platforms such as eBay, Etsy, Rakuten, Alibaba, AliExpress, Temu, SHEIN, Shopee, and TikTok are constantly catching up and standing in the second echelon.
Among them, Temu and SHEIN, which have the advantage of low-price strategy, have developed rapidly in recent years and continue to eat away at Amazon's market share. Zhu Qiucheng, CEO of Ningbo New Oriental Industry and Trade Co., Ltd., said that in the short term, Temu was able to maintain its price competitiveness and deliver products quickly, even when expanding in new regions, which had a great impact on many old e-commerce platforms.
According to the latest "2024 Mobile Market Report" released by market analyst data.ai, SHEIN will once again win the global shopping APP download championship in 2023, with Temu ranking second and Amazon ranking third.
Some experts told reporters that there is still some uncertainty about whether Amazon's measures can effectively respond to the challenges of platforms such as Temu and SHEIN.
However, experts say that the low-price strategy is still very attractive to consumers, especially in the context of the economic downturn, consumers are more focused on value for money.
SFC
Editor: Liu Xueying, Intern: Huang Lihong
"Monitoring" employees for laziness, Amazon was heavily fined
618 E-commerce Red Sea Battle丨21st Century Business Herald Special Issue
Overseas e-commerce giants first quarterly report: growth under the impact of the environment