Amazon has stepped into many industries, not just e-commerce and online services, but actually producing its own line of Amazon branded products. There has been fear among branded consumer products companies that Amazon’s efforts would severely hurt their business, but a study shows that might not be the case. Bloomberg’s Spencer Soper reports:
The explosion of Amazon.com Inc.’s private-label products — batteries, baby wipes, jeans, tortilla chips, sofas — has prompted concern that the world’s biggest online retailer could use its clout to promote these house brands at the expense of merchants selling similar products on the web store. The issue even surfaced in Senator Elizabeth Warren’s recent proposal to breakup big technology companies.
Turns out most Amazon-branded goods are flops that don’t threaten other businesses at all, according to Marketplace Pulse. In a study, the New York e-commerce research firm examined 23,000 products and found that shoppers aren’t more inclined to buy Amazon brands even when the company elevates them in search results.
The study suggests popular political and media narratives about Amazon’s market power are overblown, despite the company capturing 52.4 percent of all online spending in the U.S. this year, according to EMarketer Inc.
“This idea that Amazon can introduce a product and magically use data to dominate a category is just a conspiracy theory,” says Juozas Kaziukenas, founder of Marketplace Pulse. “There are a couple of successful examples everyone uses, but most of their products aren’t successful at all and many other companies continue to outsell Amazon even after it introduces its own competing brands.”
Read more here.
Jeremy Jones, CFA
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