The Information features a fascinating article on how, perhaps for the first time in quite some time, Amazon’s primacy as the go-to place for e-commerce is being challenged by the likes of Temu and Shein.
I wonder what and when would be a margin pressure due to low priced items on Amazon's retail business due to this decision? Or would the BuyBox simply is a real estate for Amazon to put its own Amazon Basics products more prominently?
I really liked your take on how Amazon is adapting amidst increasing competition. I wonder if (or maybe how much) this "second BuyBox" will actually impact customers' decisions. It doesn't surprise me that Amazon self-preferences, but the quality of a company's own products definitely contributes to the company's validity and consumers' trust (e.g. Costco does an excellent job with their Kirkland Signature). Great insights as always.
I wonder what and when would be a margin pressure due to low priced items on Amazon's retail business due to this decision? Or would the BuyBox simply is a real estate for Amazon to put its own Amazon Basics products more prominently?
I will be surprised if they just use it to feature their own products. The BuyBox is at the product level, rather than the search level.
Professor Allon,
I really liked your take on how Amazon is adapting amidst increasing competition. I wonder if (or maybe how much) this "second BuyBox" will actually impact customers' decisions. It doesn't surprise me that Amazon self-preferences, but the quality of a company's own products definitely contributes to the company's validity and consumers' trust (e.g. Costco does an excellent job with their Kirkland Signature). Great insights as always.
I agree: unless there is going to be a clever way to present the second BuyBox, I don't see it as a game changer.