It's a natural trend within retail marketplaces to move from selling other people's products to selling your own. You need the wide range to begin with to be useful enough that people use you, but retail can be low margin, and margin is a very important metric to optimise retail businesses, so it makes sense to introduce your own products that "cut out the middleman" so you can have a bigger share of the margin on those products.
India has introduced an interesting law that prohibits this practice – a retailer can either be a marketplace with no products of their own, or they can sell their products and not others. They can't be both, as it's seen as creating bad incentives for companies.
I think India may be taking it too far, and I think there are many business that provide value to consumers, but which depend on being able to blend together products at different margins. However I suspect we will see legal battles and/or legislation in Europe soon, as we have with cases like Google allegedly ranking Google services above competing services in Google results (a case with many parallels).
Disclaimer, I work for a "marketplace" that sells its own products alongside those from partners.
How did India unwind existing retailers? And, as a side question, what prevents retailers from doing a stupid shell company game where the product line and the retail arm are minimally legally separated but still totally the same company?
I ask these not to do a "gotcha", but because this is the first I'm hearing of this and it's fascinating and I'd like to know more.
Amazon and Flipkart used its business power in India to buy up thousands of products in bulk, sell them to vendors on their platforms, and then allow those vendors to offer the same products to customers. They also used to offer to cover vendor losses for discounts on its site using their dollar might at a loss to themselves. It was a huge incentive for heavily cost-conscious Indian consumers as an incentive to move from offline marketplace to online marketplace. This was very important in a pre-dominantly cash oriented conservative Indian market where consumers were reluctant to purchase things online due to fear of fraud. In addition to this, they started offering 0% cost financing for 6 months to purchase the products at installments without any interest rate with or without credit cards. However, what it is doing is driving offline markets out of the business as they cannot match the discounts offered by these companies. This is the reason trade association complained to the government and government decided to take this action.
For example, a smartphone that sells at $400 at offline stores would be available for $350 on Amazon/Flipkart. The cost price of device would be $350 for offline stores. You can also use No Cost financing to purchase the product for monthly payment of $58.33 for 6 months (Totaling $350). Amazon/Flipkart would absorb the interest cost. The losses are obvious as neither Amazon India Inc. (opened 2013) nor Flipkart (opened 2007 and the biggest Indian marketplace bought by Walmart in 2018 for $16 Billion) have made a cent of profit in India. Both Flipkart and Amazon had losses around $500 million for FY17-18, a number expected to go up post Walmart's purchase of Flipkart. Also, Amazon Prime is India is available for $15 a year and includes Amazon Prime Video, Amazon Prime Music and 1 Day Free Standard Shipping with no minimum order. In a country where data is basically free (30GB 4G Data with unlimited calls/messages per month for $2), this also adds to pushing people towards Amazon.
On a seperate note, a similar thing is taking place in Indian food delivery market where food delivery companies like Zomato, Swiggy or Ubereats are offering steep continuous discounts of 40-60% forcing delivery restaurants to jump into their ecosystem. The Restaurant association has also approached government with their complaints.
For Example, a Sub that sells for $4 would be delivered for $2 including delivery cost. The delivery companies absorbing rest of the costs.
The All India Online Vendors Association (AIOVA), which represents more than 3,500 online sellers did file a complaint against Flipkart/Amazon with Competition Commission of India (CCI) however, CCI did not find any violation of existing laws in Amazon or Flipkarts trade practices. IANAL but India does have Anti-Dumping and Pro-Competition laws but probably they are not updated for e-commerce. Amazon and Flipkart are able to find loop holes in it to continue their practices. Which is why Govt. imposed the marketplace cannot sell the products laws.
Even then amazon and flipkart have their own in-house brands on the their websites. And Big Bazaar (akin to Walmart) sells its own in house items under different names. They’ve already found loopholes.
Not very useful. Many of the listings have “Amazon” in the name so it’s obvious who owns them. Most of the rest are branded items, which isn’t the same as a “business” because I think most people know that retailers sell branded items, and besides, Amazon prominently identifies many of these, such as “Pinzon by Amazon”. So really all that is left is maybe half a dozen items, like Zappos and Whole Foods.
Eh, I think it can be useful to others. Your point about Amazon being explicitly part of some of the names is certainly fair. However, a few months ago I saw something on HN that has had me informally polling friends to see if they know who owns YouTube. I find it so obviously owned by Google, but to my surprise most of my friends I've asked didn't know (20s, some of them in PhD programs). Well aware this is not a statistically valid poll, but my point is that there are at least some well educated people who have no clue about some of these corporate relationships.
I've run into quite a few people who denounce amazon and then say they shop at abebooks.
I will add, it gets really annoying having to use different sign ins. I collect old rare cookbooks. So sometimes I'm on the italian, french and other euro stores. You'd think amazon would just link it to the regular store and have the listed abebooks under the used merchants. That's not always the case. For login, same goes with the other amazon euro stores.
The clothing one "Goodthreads" sounds like sort of a play on their existing GoodReads brand. I'm disappointed there weren't more like this: Slumberyard for pajamas, Fruit 53 for produce, Breadshift for baked goods, etc.
I have the most bizarre sensation when reading through this. On one level, they're just boring brand names. But knowing that they were all created by Amazon for Purposes and their names chosen presumedly by marketing folks... Well, it sorta makes this read like the most genius piece of satire about today's retail marketplace. It would fit somewhere between McSweeny's lists[0] and AI-written paint color names[1]
I think Costco is built on baby boomers and it become a cult to spend time in warehouse, walking through huge aisles, discovering those treasures and samples. Amazon on other hand needs economies of scale by constantly sending you notifications or keeping track of your habits.
Costco also uses the same strategy to comeup with products. I used to see GT Kombucha and now costco has their own line of Kombucha as well. This is similar to Amazon where you observe the products at someones cost and make it inhouse if its viable. Another fact with Costco the costs being low is the businesses that sell at costco can only have as much as 20% of their total revenue from Costco -- which is like paying only for the variable cost as the rest 80% of revenue would absorb that fixed costs in supply chain. This is a huge bonus.
I'm guessing it's some kind of A/B testing done by Amazon. Do people trust in the Amazon brand, or do they rather buy from unknown brands that offer cheap but decent quality (compared to the cheap and poor quality counterparts that flood the site)? Each brand is probably there to answer a specific question (or set of).
Years ago got an account with Abebooks because I didn't like Amazon keeping such a detailed list of every book I ever thought to read or bought as a gift for someone else. Then I found out Abebooks is still Amazon. (Didn't have this list to refer to back then.) Closed that account and now buy my books through Alibris and the used bookstore by the university. Feels good to support independent booksellers and resist the Amazon-Borg collective.
So how is this different than standard oil again? Not that I'm advocating breaking up the tech companies but it's no coincidence that the growth of the modern conglomerate has also strongly correlated with income disparity. Instead of 5 CEOs and 25 VPs, you now have 1 CEO, 5 VPs, and 25 Junior VPs all being paid less because they no longer get the same share of the equity.
From what I understand, Standard Oil used their dominance in the market to stifle competition and 'restrain trade'. Because Amazon is big doesn't necessarily mean they are doing these things. I would imagine they are being very careful not to fall foul of these laws, unlike Microsoft in 2001.
There’s certainly a argument to be made on stifling competition if even Walmart has trouble keeping up. What hope do small to moderate regional retail stores have? All that regional wealth is sucked up online and redistributed to a few managers of mangers instead of actually making the communities better by allowing people to own a part of it.
The biggest problem that’s causing income disparity is that people are consuming things rather than owning things.
> Alexa Internet: Acquired by Amazon in 1999, this Amazon subsidiary, based in California, provides companies with commercial web traffic data and analytics.
Interesting (and entirely unsurprising, really) that the “personal assistant” was (probably) named after a data gathering/analytics company.
All of the big things on here I already knew were owned by Amazon (Zappos, IMDB, etc.)...all of the small things were trivial clothing imprints or similar. This is a pretty substanceless piece.
Honestly, there isn't any company on this list that I had heard of before that I didn't already know was owned by Amazon. And most of the list is just brands, not entire companies or businesses.
India has introduced an interesting law that prohibits this practice – a retailer can either be a marketplace with no products of their own, or they can sell their products and not others. They can't be both, as it's seen as creating bad incentives for companies.
I think India may be taking it too far, and I think there are many business that provide value to consumers, but which depend on being able to blend together products at different margins. However I suspect we will see legal battles and/or legislation in Europe soon, as we have with cases like Google allegedly ranking Google services above competing services in Google results (a case with many parallels).
Disclaimer, I work for a "marketplace" that sells its own products alongside those from partners.