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Top 5 Marketplace Takeaways of the Week #10

Estimated reading time: 6 minutes

Welcome to this week’s round-up where we take a look at Amazon’s decision to merge its ad business into one platform, further furore over its tax bill in the UK, eBays Autumn 2018 Seller Report and more!

Amazon to consolidate its ad businesses

amazon logoAmazon is looking to consolidate its ad businesses into one platform to help advertisers whether they sell their products directly to Amazon or if they sell them directly to shoppers as third-party sellers. It has been said that Amazon is working on a platform ‘that will fold all campaign reporting and advertising products from the Amazon Media Group, Amazon Marketing Services and Amazon Advertising Platform divisions into one place.’ These changes will help sellers who have both Seller and Vendor accounts and run advertising on each. Currently, those doing so have to be careful to ensure that their campaigns do not compete with one another, however, a consolidated advertising platform would remove this issue. Amazon is attempting to simplify its advertising platform to try and encourage more advertisers and more ad spend, in the latest reported quarter Amazon generated $2.2bn whilst Google and Facebook posted $28bn and $13.3bn respectively.

China’s internet giants will cause trouble for US/EU food retailers

If people want a good idea of what Amazon will be doing shortly they need to be taking a look at what is currently happening in China. Amazon’s purchase of Whole Foods last year wouldn’t have come as a surprise to anyone who has been keeping an eye on Alibaba which had launched Hema (a blend of online grocery shopping, dining and bricks and mortar) 18 months previous to this. Alibaba already has 57 Hema stores, with plans to have 100 by the end of March next year. Food retailers in Europe and the US need to be paying attention to what is happening in China as it will give them an insight into what Amazon is likely to do in the Western world. One of the big points which has been in place in China for well over a year now is the concept of checkout-less supermarkets. Amazon is still in its trialling stage with the Amazon Go store in Seattle, but it is, without doubt, something that will begin to roll out across the US and eventually Europe. This should be telling traditional food retailers that they need to look into their checkout processes, with more and more consumers wanting a quick and fuss-free convenience shopping experience. That said, it isn’t just checkouts and payments which food retailers need to be thinking of, JD.com has also already introduced robotic carts which follow shoppers around the store, as opposed to having to push trolleys which sometimes have a mind of their own. Alibaba’s Hema supermarket in Shanghai has also recently launched a robotic restaurant where customers can pick their main course from the grocery aisle, staff send it to be cooked via an overhead conveyor belt and robots then transport the meal from the kitchen to the customer. All in all, food retailers in Europe and the US need to be very aware of developments in China, as inevitably, they are going to have to tackle the same issues at some stage.

eBay’s UK Autumn 2018 Seller Release

ebay logoeBay has just published its Autumn 2018 Seller Release in the UK and there are a few key points in it which will undoubtedly impact upon businesses selling on the platform. One of the most notable changes is that the cost of adding subtitles to listings is to double to £2. This could catch sellers unaware especially if they use Good til Cancelled listings which will automatically renew, leading to an increase in the monthly invoice if subtitles are not removed. Starting on October 1st, a 4% final value fee surcharge will also apply to sellers who have the most ‘Significantly Not As Described’ complaints from buyers, as measured against competitors. Another big point raised in the latest release is that of duplicate listings. eBay will now demote ALL of a seller’s inventory if they have duplicate listings (not just the duplicates) as a punishment, this also means that if a seller has an ebay.com listing and the same listing on ebay.co.uk but with international shipping to the US then all listings for the accounts could be demoted in search. eBay is also going to begin blocking listings which contain insecure content (from HTTP sites) from early next year, this means that any images embedded in the descriptions for listings must be stored on a secure HTTPS server if they are to be included in the listings on eBay. You can view all of the updates from eBay here.

Amazon’s UK tax bill falls

The tax bill for Amazon in the UK fell last year despite its profits nearly trebling. Amazon UK Services had a tax bill for £4.6m, which was down from £7.4m a year ago, however, it was able to defer £2.9m of this £4.6m. As a result, Amazon has currently paid £1.7m in tax for now. All of this is despite the fact that its pre-tax profits jumped from £24.3m to £72.3m (a 297% increase!). Upon investigation of accounts, one of the main reasons for the lower tax bill was a rise in ‘share-based payments for staff’, with Amazon stating full-time warehouse staff on average ‘have received shares worth more than £1,000 a year.’ Another of Amazon’s UK businesses, Amazon Web Services UK has followed suit with taxes falling from £404,000 to £155,000 despite profits increasing from £2.7m to £5m. These figures only provide a glimpse into Amazon’s UK tax affairs, with actual retail sales routed through a different company than Amazon Services UK.

China’s third-largest e-commerce site facing lawsuits in the US

The third-largest e-commerce site in China behind Alibaba and JD.com, Pinduoduo is facing lawsuits in the US. The lawsuits have come following media reports that it has been selling fakes and knock-offs over the platform which has resulted in its share value tumbling. The class-action lawsuits are being brought on behalf of individual investors who had previously bought shares in Pinduoduo. There has been a barrage of media reports in China claiming that Pinduoduo has been actively selling low-price imitations with a high resemblance to brand names of well-known products. Examples of the issues include baby nappy products being sold called ‘Pampois’ and ‘Parmepas’, which Pampers (owned by P&G) has said it will ‘investigate the legal liability of responsible persons, including both producers and sellers.’ Pinduoduo’s GMV reached 66.2bn yuan for the first quarter of 2018 with the platform having over 295m active buyers by the end of March.

If you have any questions or queries regarding marketplaces including Amazon, eBay, Alibaba or JD.com then feel free to get in touch with us to see how we can help.

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