Top 5 Marketplace Takeaways of the Week #7

Welcome to this week’s round-up where we take a look at Amazon’s workers striking on Prime Day, eBay rolling out fulfilment in Australia, JD.com shifting its focus towards brands and more!

Prime Day workers strike

Prime Day is one of Amazon’s biggest retail events of the year alongside Black Friday, Cyber Monday and Christmas, however, this year its workers in some European countries went on strike. Workers in Germany, Spain and Poland took industrial action as they demand better conditions. This strike was not insignificant given that Germany is the e-commerce giants’ second biggest market after the USA. Germany’s Verdi services union has claimed that Amazon was getting rich by “saving money on the health of its workers“, Amazon rebuked the claims and said its workers are paid fairly ‘with permanent staff earning €12.22 an hour or more after two years.

Whilst Amazon said it only expected a fraction of its workers to take action, it still coincided with other issues on Prime Day including the website crashing for consumers. Many consumers (mainly in the USA but shoppers in other continents were also affected) just got a screen which stated “sorry, something went wrong on our end” when they tried to access the site. Still, whilst the official stats aren’t yet available for Prime Day 2018, it can be expected that it will have produced significant numbers in terms of sales and revenue for Amazon.

Introducing Prime Wardrobe

Amazon has introduced Prime Wardrobe to its range of services exclusive for Prime members. The idea behind Prime Wardrobe is that customers can pick three or more items across either clothing, shoes and accessories, these will then be sent out to the customer for them to try on (they have a seven-day try-on period) after which the customer checks out online for the items which they wish to keep and will then send back the items which don’t fit using the provided UPS return label. Amazon claims that the key benefits to Prime Wardrobe are that a customer can try before they buy, only being charged for the items they decide to keep, a wide selection of brands to choose from and returns are simple with a resealable box and prepaid label included in the delivery. Items which are eligible for Prime Wardrobe are labelled accordingly on the listing and there are currently over 1 million items which are eligible. If a customer decides to buy two or three of the items ordered they will receive a 10% discount, should they keep four or more items then they will receive a 20% discount.

Streaming services become the viewers choice

For the first time, streaming services such as Netflix and Amazon Prime TV have overtaken pay-TV providers in terms of the number of subscribers. The total number of subscribers in the UK to the three most popular online streaming services (Netflix, Amazon & Now TV) hit 15.4m at the end of the first quarter of 2018, whilst the number of subscribers to pay-TV packages was 15.1m according to a report published by Ofcom. Amazon has put a lot of money behind its Prime TV service, alongside Netflix, the two companies have spent over $10bn annually on content. The revenues for pay-TV of the four major companies (Sky, Virgin, BT & TalkTalk) fell for the first time in a decade in 2017, whilst subscription on-demand revenues (mainly those paying for Amazon & Netflix) leapt by 38%.

Amazon is clearly putting significant effort and backing behind its Prime TV service, especially with live sporting rights including Premier League coverage from 2019/20. Those signing up for Prime TV are more than likely to make additional retail purchases on the site thanks to the free next day delivery and other additional benefits for Prime members.

Fulfilment by eBay rolls out in Australia

Typically eBay sellers have been left to sort out their own fulfilment of orders, with some assistance from eBay in the form of their Global Shipping Program and the Click and Collect option. Now it has been announced that eBay is introducing a fulfilment option in Australia where sellers can send their products into eBay who will then store and ship the products as required. The Fulfilment by eBay service is in partnership with a fulfilment company named Fulfilio. One of the big perks of utilising eBay’s fulfilment program is that a seller’s products will automatically qualify for eBay Guaranteed Delivery and eBay Plus (providing the account is eligible), it may also provide access to eBay Deals. To get started with the service all Australian eBay sellers need to do is sign up, ship their inventory to Fulfilio and then wait.

JD.com shifts its focus towards brands

Chinese online retailer JD.com is shifting its focus from just retailing towards technology that ‘can be placed at the service of brands both online and offline’. Winston Cheng, president at JD.com has said: “the first 12 years as a retailer we were Gross MErchandise Volume-focused… the second 12 years is going to be about helping brands and retailers and others build their online presence, build their brands and have more efficient marketing”. JD.com will utilise the vast amounts of data it has from the over 300m customers on its platform as well as plans to gather data from traditional bricks and mortar stores (something Chinese rival Alibaba is already doing through the use of beacons and wifi). Cheng has said that once JD.com has this info in place it will help brands and retailers “on the supply chain…they need to make sure they’re producing the right things.”

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.