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Is this the end for Amazon?

When you’re shopping for something on Amazon, you’re probably hoping to end up with a product that looks like this: good enough. Many of the site’s stock images and product descriptions have an unpredictable relationship to the actual objects you will receive. To prepare for the unexpected, you should frequently peruse ratings and reviews left by previous shoppers. In exchange for this low-stakes gamble, you get a huge selection, affordable prices, and lightning-fast shipping. often enoughyou also get good enough result.

This balance is part of what makes Amazon such an incredibly profitable business. Over time, the company has transformed itself into one that functions more like a global flea market than a traditional retail store. Most of the products on Amazon’s website are sold by millions of third-party sellers, many located outside the United States, who create their own product listings and send most of their inventory to Amazon’s U.S. fulfillment site. It is stored at the center. Since Amazon launched its marketplace in 2000, sellers from all over the world, especially China, have flocked to the program. When you purchase something through these listings, Amazon receives a portion of the sale to streamline your interactions with businesses that are actually located in Guangzhou or Shenzhen.

This approach has had some benefits for all parties. Sellers now have more direct access to American consumers than ever before in the traditional retail model, and those consumers may have to take more guesswork to sort through everything than choosing products at their local Target. But you will have access to a wealth of inexpensive products. But the biggest beneficiary of all was Amazon, which successfully persuaded customers to accept fundamental flaws in its site and many of its products. The success of this system led the retailer to grow into the Everything Store. That could lead to the ultimate end of Amazon’s dominance.

For several years in a row, American media has puzzled over the new rise of ultra-low-cost international retailers that ship much of their inventory directly from Chinese suppliers to Western buyers. Founded in China and now based in Singapore, Shein was the first of these retail giants to enter the U.S., luring young shoppers in the early days of the pandemic with clothing so cheap that H&M looked like a splurge. The company has expanded its offerings to include a host of electronics, sporting goods and office supplies, generating $23 billion in 2022, making the US its largest revenue market. Next came Temu, founded by Chinese conglomerate PDD Holdings and headquartered in Boston. Temu introduced itself to U.S. shoppers through a Super Bowl commercial in February. Analysts estimate that the company is on track to bring in $16 billion in revenue this year.

The sudden rise of these companies is starting to cause alarm. That number is tiny compared to Amazon’s $220 billion in online sales revenue in 2022, but surprisingly high for a company so new to American shoppers. In comparison, Target will generate approximately $20 billion in revenue from its website in his 2022 year, which shows that Shein and Temu were able to successfully launch an online retailer the size of Target in just a few years. means. Many people seem upset about this development, feeling that China has entered the American retail industry completely without permission. last week, bloomberg They worry that the rise of these retailers means a “heap of Chinese junk” will be at the top of the Christmas list for American consumers.

This sentiment is a little rude and a little late, but it’s not necessarily wrong.Americans are getting cheaper imports. thing, Chinese, etc., for decades. The shelves of places like Walmart, Target, and Costco are filled with cheap foreign products. This is the reality of American shopping, whether buyers realize it or not. Regular consumer sentiment surveys show that a majority of Americans say they don’t buy or don’t want to buy things made in China, but their behavior usually says otherwise. Those preferences are not and are not reflected. What’s new this holiday season isn’t that Americans are buying cheap stuff made in China. That means they’re buying from Chinese companies that appear to be pushing online retail to its logical extremes.

Somewhat paradoxically, Amazon appears to be largely responsible for how this unfolded. For most of Amazon’s existence, one of Amazon’s primary marketing functions was to give products that were conceptualized, designed, and produced entirely overseas, but without a recognizable brand name, an authentic American guise. Was that. In exchange for its familiarity and access to audiences and logistics services, Amazon captures the lion’s share of each sale, or about half, according to estimates from earlier this year. Amazon has responded to numerous overseas companies that collect meaningless letters such as JOYMOOP and RFUNGUANGO and sell them on Amazon. was A brand that has made its product available for sale in the U.S. Buyers may not be familiar with the name or product, but they trust that Amazon will send it to them quickly and take it back if they don’t like it. was doing. Amazon made the unknown seem trustworthy enough, or at least American enough.

But over time, Amazon began to lose its American identity. As people have become more comfortable buying foreign products on the site, the site has also started to feel more foreign. Browsing through Amazon comes with a strange sense of placelessness. Even if it is not at all clear who you are dealing with, there is no escaping the reality that you are not dealing with Americans. teeth We are doing business with. Product descriptions are getting weird, and it’s clear that many of them, even if they were written by humans, were not written by fluent English speakers. The photo is eerie due to its odd proportions and obvious alteration. Earlier this year, journalist John Herman described the decline in the quality of the shopping experience on Amazon as “junkification.” A Turkish seller talking about towels, a Chinese seller talking about headphones, and a Korean seller talking about skin care products all sound the same. These days, key elements of product listings have been mediated by retailers’ experimental forays into artificial intelligence, placing stock-image toasters in fake kitchen landscapes and distilling long customer reviews into lofty soundbites. doing.

American shoppers seem to be adjusting well to this new and strange shopping experience. People don’t seem to care much that a product comes from elsewhere, as long as the price is right, especially since inflation has made purchasing power difficult for domestic retailers. On the surface, this is good news for Amazon. The company has long-standing evidence that a lack of quality and consistency is not necessarily an obstacle to increasing profits. Amazon’s reach and power are currently unparalleled, as its profits continue to grow alongside its logistics business, which delivers billions of packages annually.But in a broader sense, what satisfies consumers; how Amazon’s success may also mean that its own obsolescence as a retailer is baked into its business model. At least Walmart and Target have more to offer to consumers looking for a wide selection and affordable prices. It’s a large network of long-established brick-and-mortar stores that most shoppers still prefer. For Amazon, which has so far been unable to forge its own brick-and-mortar retail strategy, its credibility in the country is weakening as U.S. shoppers become accustomed to risk and unpredictability in everyday transactions. The company’s superficial value is fading with each passing day.

That, more than anything, seems to be what Shane and Tem (and, to some extent, TikTok Shop) are hoping for. In its pursuit of continued growth, Amazon forces millions of Western shoppers to buy what they may find useless junk from unseen overseas sources. Why not eliminate American intermediaries? (Amazon likely disputes the charges, especially given that it has been accused in antitrust lawsuits by the FTC and 17 state attorneys general of attempting to exercise anticompetitive control over sellers.) ) or a reliable-looking user interface to achieve that — after all, Amazon isn’t a website known for the clarity of its information or its aesthetic appeal. Temu and Shein are promising to take these very claims to court against sellers and significantly lower fees for using their platform. It also requires sellers to display relatively little information about the products they sell.

It is unusual to find listings that appear to be promoting the same product, or at least similar enough that it is difficult to parse out the differences, across all major marketplace retailers, whether made in the US or not. Not. Shein and Temu are usually, but not always, cheaper. In some cases, it can be quite cheap. Keeping prices down to unprofitable levels is a common tactic used by new retailers to steal market share from competitors. Amazon has been using this for years to move newcomers away from local brick-and-mortar stores and toward online shopping. Currently, Temu appears to be using a strategy to steal sales from Amazon.

Amazon, for its part, disputes the idea that the products available on its website are similar to those sold by its international peers, going so far as to exclude products from its price-matching policy, and told Reuters there are strict standards. Competitors that are considered to have a good reputation. However, while shoppers seem willing to try these cheaper options, it’s unclear whether there’s much room between these options and what’s available on Amazon. If so, it’s unclear how much they care. Amazon’s tactics and dominance have greatly contributed to rendering the purchasing process completely meaningless. In the end, the company may not like what it means.

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