SIOC Packaging Benchmark; Amazon Shutting Down China Business; Sponsored Products Sees Best Returns
SIOC Requirements Remain a Challenge for Amazon Vendors
Branded manufacturers appear increasingly concerned about the impact of Amazon’s new Ship in Own Container (SIOC) requirements for oversized and heavy items. In response, we recently benchmarked 125 brands to gauge the scope and impact of SIOC. The exact response depended largely on a given brand’s characteristics, particularly the cost to design and implement new packaging. Even with these costs, the most common response was trying to achieve SIOC compliance where possible, especially as brands believe that SIOC requirements will likely spread to include smaller and lighter product as well as to other retailers. Included in our report we also include a framework for how brands should ultimately come to the right decision for their products.
Amazon Shutting Down Domestic China Business
The Financial Times reported that Amazon is closing it’s domestic marketplace on Amazon.cn and will only be selling imported goods from the US and elsewhere. Amazon has struggled to compete in the domestic market since their purchase of Joyo.com in 2004, and has lost market share to domestic competitors including Alibaba’s Tmall and JD.com, and had less than 1% market share according the iResearch. Amazon has a stronger position in the imported goods business with 6% market share according to iResearch, although this remains small compared to Alibaba’s Tmall International’s 32% share and NetEase’s Kaola’s 25% share. Reports have also indicated that Amazon is considering merging it’s import business with Kaola, however Amazon has decline comment on these rumors.
Sponsored Products Delivers Best Returns
Feedback from our recent LiveCast event indicated that respondents were seeing the best return on investment from Amazon’s Sponsored Products offering, with Sponsored Brands the next most common response.
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