When Push Comes to Shove, Amazon Does Cut Prices
Is the fierce competition with China’s Shein proof of the e-commerce giant’s market dominance or proof that the market is doing its job?
Shein’s growth has been stratospheric.
Photographer: Yuki Iwamura/Bloomberg
So how about that? When Amazon.com Inc. faces real competition, it lowers its prices. Drastically so, it turns out: Starting next year, its commissions on sales of cheap apparel are dropping from 17% to as low as 5%, it announced last week.
The reason, while not explicitly mentioned by the e-commerce giant, is the Chinese fast-fashion retailer Shein.1 Its blend of rapidly manufactured styles at extremely cheap prices has proved so popular with shoppers that they have been happy to overlook slower delivery speeds. Shein products typically arrive in a week or more, compared with one or two days for Amazon’s. In this category, at least, price wins. Shein’s growth has been stratospheric, and Amazon must adjust.