Amazon shuts down BuyVip, the online company that it acquired in 2010 to enter the Spanish market. Specifically, BuyVip put an end to its operations on May 31date on which it closed definitively in Spain, Germany and Italywhere it operated until now.
Despite the announcement that Amazon is closing BuyVip, this will not represent the loss of work for any person, since the staff of approximately 50 people will be relocated to other areas of Amazon.
The 3 reasons why Amazon closes BuyVip
But seven years after its acquisition, the question arises Why does Amazon close BuyVip? The answers can be very punctual:
1. BuyVip is not profitable
According to Amazon, even as it worked to offer a broader catalog of products and innovative features, profitability was never achieved in the three countries where it operates.
At the time of your purchase, Amazon paid a 70 million euros for her. At that time she had some 7.5 million registered users and was also present in Holland, Portugal and .
It was considered at one time a case of success in its internationalizationbut when it passed into the hands of Amazon, reduced his presence to the three countries where it currently operates. It was a reference business for private sale clubs, but another problem arose.
2. Increasing competition
The flash sales industry has created rivals that are getting bigger and bigger and little by little they have carved out a niche for themselves in the Spanish market. These portals, which are dedicated to off-season stock sales of fashion brands, need a large volume to attract the best brands and have very small profit margins.
When you start in a new sector you don’t have much competition, but little by little the recipe starts cloning and the online market has been filled with very strong companies in the flash sales sector and a concentration has begun. Almost a year ago, the Frenchwoman, who It was the second player in the sector in Europe and the pressure on flash sales continues.
BuyVip’s competition has managed to cover the business better and offer more attractive discounts, and in this case Amazon did not manage to take off from the whole project, but it was able to learn from the field of flash sales.
3. BuyVip flash deals are already running on Amazon
Not everything is loss, since Some of the BuyVip features were gradually offered on Amazonparticularly flash deals.
In addition, many of the usual brands of private purchases they are sold openly on the Amazon website at fairly competitive pricesso the existence of BuyVip lost more and more meaning since the company could privately online in its most famous commercial space.
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