One piece sold in 5 seconds! Amazon's popular categories face both danger and opportunity

The industry is in decline and the market is negative. Since the beginning of this year, losses, closures, and bankruptcies have become commonplace. Some people have collapsed in the crisis, while others are gritting their teeth and standing firm.

Blame the sluggish market? Consumer spending is still increasing. Blame the category for being unpopular? Some people sell one in 5 seconds, and the sales of a single product can circle 75,000 football fields. Even on Amazon's US site, this category has repeatedly ranked first in sales.

The number of items sold is enough to cover 75,000 football fields. The US home furnishing market is still hot.

Recently, Google released the 2022 annual TOP100 product list based on the search trends of the past year, among which the home category ranks high and occupies the most seats. The data shows that the search volume of kitchen appliances will soar in January every year , the search popularity of thick blankets will peak in December every year , and the search volume of mushroom lamps will also surge .

Now happens to be the annual sales explosion period for related home furnishing categories. In the just-concluded Black Friday online promotion, home furnishing e-commerce giant Wayfair reaped a lot of benefits .

Wayfair's battle report shows that on Black Friday , a piece of bedding was sold every 5 seconds on its platform , and a washstand or faucet was sold every 13 seconds . Not only that, the carpets purchased by shoppers on Black Friday were enough to cover more than 75,000 football fields, the high stools purchased were enough to line up 4 rows on the entire Las Vegas Strip, and the Christmas trees purchased added up to 845 trees in Rockefeller Center .

Wayfair also highlighted that repeat customers accounted for 73% of its weekly online orders, with hundreds of thousands of new consumers purchasing products from Wayfair for the first time.

Wayfair Chief Executive Officer Niraj Shah said higher prices had boosted its order values , while Cyber ​​Week would also boost the company's overall sales in November .

Although Amazon did not release specific promotion data, it also stated that the home furnishing category ranked among the top sellers in the TOP list during the entire Internet Week .

On Amazon, the home furnishing category has always performed very well and is considered to be the top-selling category on the platform.

It is understood that between the first quarter of 2020 and the first quarter of 2022, the GMV of home products on Amazon increased by 84%.

As of the second quarter of 2022, Amazon's share of the U.S. home furnishing market grew by 4.7 % year-on-year . Data also showed that during the Prime Day events in the past two years, almost all home furnishings subcategories on Amazon achieved positive year-on-year growth.

During this year’s Prime Day, household items beat electronics to become the “big brother” on Amazon’s sales list .

In the UK, even though the living crisis continues, the British who pay attention to fashion and hygiene throw away nearly 70 million outdated household items every year . As a result, about 2.2 billion pounds worth of household items are sent to landfills every year , and discarding the old and replacing them with the new brings new demand to the market.

Although the above data show that the market performance of this category is very positive, in fact, Wayfair also admits that the loss of sellers on its platform is increasing month by month, and many European and American home furnishing giants have also entered the stage of bankruptcy liquidation.

Buyer loss accelerates, home furnishing e-commerce giant loses nearly $400 million

According to the Q3 financial report of Wayfair , a US home furnishing e-commerce giant , its net income fell 9% year-on-year to US$2.8 billion, of which US revenue fell 6% from last year to US$2.4 billion, while international revenue fell 24% to US$400 million.

In the third quarter alone , Wayfair's operating losses swelled to $372 million from $70 million a year earlier , while net losses grew to $283 million from $78 million.

Although advertising spending continued to increase, reaching $353 million, Wayfair 's active customers continued to plummet. As of September 30, Wayfair had 22.6 million active customers, down 22.6% from the same period last year . In Q3 alone, its active customers shrank by 1 million.

Furthermore, even existing customers, which account for 77% of Wayfair's sales, saw 19% fewer orders than last year .

Wayfair's sales were greatly boosted at the beginning of the epidemic . But its performance has been declining since then . In two years , Wayfair's net income has dropped by about 26% .

Neil, Managing Director, GlobalData   Saunders once said that although inflation has an impact on most retailers, Wayfair is more affected by the current economic environment because most of the products sold by Wayfair are categories that consumers are prone to impulse purchases , so when their wallets are empty, consumers will first cut spending on such products.

It is understood that Wayfair's market value has shrunk by 83% this year . In the past 10 years, Wayfair 's total revenue has increased 14 times, from US$1 billion to US$14 billion. However, by 2021, Wayfair's total revenue has continued to decline, and its total profit fell by US$1 billion last year alone .

In the U.S. home furnishing market, it's not just Wayfair that's experiencing a downturn. Other retailers are also facing sales difficulties.

According to data company YipitData 's tracking and observation of 30 home and furniture retailers in the United States , the market GMV of the home category has declined since the beginning of this year , breaking the situation of stable growth in GMV of the home category in the United States since the epidemic and record sales of many home retailers .

Compared with last year, the monthly GMV of the top 10 home furnishing retailers in the United States has generally declined, and consumers have begun to spend less on home furnishings.

The home furnishing platform went bankrupt within one year of listing, and its market value shrank by nearly 400 times

Since the beginning of this year, affected by the cold market, many platforms and companies that once occupied high positions in the e-commerce industry have failed to survive the cold winter and have gone bankrupt one after another.

In November, Made.com , a home furnishing e-commerce platform founded by Chinese, declared bankruptcy. Subsequently, British retailer Next announced that it would acquire Made.com for 3.4 million pounds.

Just a year ago, Made.com announced its IPO, and its market value soared to 775 million pounds . However, this year, Made.com's share price has plummeted, plummeting 93% in almost ten months , and its market value has shrunk to 2 million pounds.

It is reported that as of the end of June this year, Made.com owed suppliers, warehouses and other fees of at least 75 million pounds .

Nicola Thompson, chief executive of Made.com, said: “Over the past few months, we have exhausted all possible avenues to raise new capital and avoid bankruptcy . However, the global macro environment is worrying, the business is not viable in its current iteration, and we are unable to adjust quickly enough. ”

Home demand surged during the epidemic, but after the epidemic stabilized, demand slowed down . Coupled with the financial crisis caused by inflation and the energy crisis , consumer demand further declined.

Zelf, Joint Administrator of PwC   Hussain said Made.com was a victim of headwinds in the home furnishing industry .

As far as the home furnishing market is concerned, it is not just Made.com . European home furnishing e-commerce company Eve Sleep , which was established eight years ago, has also declared bankruptcy and liquidation due to continued losses and inability to operate .

At the same time, the performance of other home furnishing e-commerce companies also took a sharp turn for the worse . The share price of German home furnishing and furniture e-commerce Home24 fell 80% in a year , and it also announced that it had decided to sell its business due to its inability to cope with the decline in sales .

In the United States, the business of home furnishing e-commerce giants led by Wayfair is not optimistic . To cut costs, Wayfair laid off about 900 employees ; and BedBath & Beyond, known as the "American version of IKEA" , lost $358 million in the first quarter of this year alone , with sales down 25% , so it also decided to lay off 6,000 employees and close 150 stores .

Giants are losing users, new entrants are constantly going bankrupt, and the current European and American home furnishing industry is also experiencing a decline in sales after the surge caused by the epidemic, and the consumer market has become quiet. However, "crisis" means "opportunities" in "crisis". The demand for home furnishing products is still strong, but consumers are cautious about spending. If sellers keep up with the trend, understand market demand, and pay more attention to products, they may be able to tap new business opportunities in adversity.

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