Amazon v. Shein
Daily Data: Checking in on the great platform battle and the persistence of cheap stuff online
Plus other insights from Black Friday, like “where to buy makeup to be hip with all the latest trends?”
Everything reads better in your browser or in the app. The footnotes especially, and Random Walk is really leaning into the footnotes. Plus, if you have the app, you can set delivery to “app only” and then my daily barrage will feel less like a barrage. Unfortunately, substack does not yet have a “Weekly Digest” option, but I’m hectoring them aplenty.
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Amazon v. Shein
Last week, Random Walk mused about the reemergence of basically free stuff on the internet.
More specifically, the incredible rise of Chinese “fast fashion” (and other discount) retailers, Shein and Temu (collectively “Shemu”).1 They appeared to be achieving that rise through extravagant ad spend and absurdly low prices, which is reminiscent of the good old days when e-commerce brands could grow-grow-grow by losing money on every sale.
Well, since then, Shemu’s clout has already forced Amazon to make some changes (that are less good for Amazon): Amazon has lowered its own Seller fees.
If Amazon sellers are going to compete with Shemu’s prices, then Amazon needs to leave a little left over for the sellers to keep for themselves.
And so they have:
Unsurprisingly, fees get progressively lower as the stuff gets cheaper.
Who knows how long they can keep this up, but presumably Amazon will work pretty hard to defend market share.
Brick n’ Mortar is Back!
Another quick observation about this year’s holiday’s shopping.
There was basically one category of stuff that’s now bought online less than it was before the pandemic. In other words, ecommerce has not only stopped growing (for that category), it’s actually gone backwards.