Another e-commerce platform in the United States is facing bankruptcy, and is the blame directed at Amazon?

The overseas market has been cold this year, with news of large-scale layoffs and bankruptcies of various e-commerce platforms being common.

However, recently, Zulily, a well-known American maternal and infant e-commerce platform, filed a lawsuit against Amazon after announcing large-scale layoffs, blaming Amazon's malicious competition for its bankruptcy.

Zulily faces bankruptcy and sues Amazon for malicious competition and price war!

Recently, Zulily , a well-known American maternal and infant e-commerce platform, filed a lawsuit against Amazon, accusing Amazon of manipulating product prices and forcing suppliers to offer the lowest prices.

It is understood that the lawsuit was filed in the U.S. District Court in Seattle, and part of it is based on the allegations in the U.S. Federal Trade Commission's (FTC) antitrust lawsuit against Amazon.

Just in November, the Federal Trade Commission described Amazon's anti-competitive tactics against Zulily and its suppliers in a public complaint.

But it is worth noting that Zulily ’s operations seem to have encountered major problems recently , and all signs indicate that the company may face bankruptcy.

Last week, Zulily officially announced that it would close its Seattle business and carry out large-scale layoffs. It is understood that more than 800 employees were fired, and the company also issued a statement on its official website to start a clearance sale.

Zulily said in a statement that during the clearance sale, all products are at great discounts and the promotion will continue until the stock is cleared.

Some industry insiders are currently speculating that Zulily's large-scale layoffs and business adjustments are closely related to Amazon's malicious competition , but Zulily did not point this out in the lawsuit.

Zulily said that Amazon's behavior caused the company to suffer significant revenue losses and affected the website's traffic. In addition, Amazon also affected Zulily's competitive advantage in the market by manipulating product prices.

Zulily cited the FTC's antitrust lawsuit against Amazon in this lawsuit, saying that Amazon began to suppress it in 2019. At that time, Zulily compared the same products sold on its official website and Amazon platform and found that the price shown to consumers on the Amazon platform was lower.

Zulily also said in the lawsuit that despite this, Amazon continues to compete unfairly and try to destroy Zulily. Amazon artificially raises Zulily's product prices by forcing third-party sellers and wholesale suppliers to sign price parity agreements, while at the same time punishing sellers who do not comply.

Amazon’s penalties include canceling the “Buy Box” that the seller has obtained on Amazon and prohibiting the seller from continuing to sell products on the Amazon platform.

Amazon has not yet responded to Zulily's allegations.

But last week, Amazon filed a motion with the Western District Court for the District of Washington, asking the judge to dismiss the FTC's antitrust lawsuit against it.

Amazon argued that the FTC had not provided evidence that its practices raised prices or harmed consumers.

Amazon said it was simply engaging in "common retail practices" that benefit consumers and are the nature of competition.

Amazon's lawyer Heidi Hubbard said the FTC 's antitrust lawsuit against Amazon is incredible and illogical, arguing that Amazon is somehow raising prices for goods across the entire market in order to keep prices low on its own platform .

In addition, Amazon also stated that the FTC did not provide any evidence that Amazon's actions raised prices for goods in the entire market or harmed the rights of consumers .

Amazon has always insisted that it is not a monopolist, but part of the fierce market competition. It said its goal is to provide consumers with more product choices, lower prices and better services, while also providing platforms and market opportunities for sellers and partners. Amazon said it will work with regulators to resolve the current problems and will also defend its legitimate rights and interests.

Zulily started out as a flash sales company, but was acquired twice!

According to public information, Zulily is a group buying website for maternal and infant products in the United States . It was founded in 2009 by Mark Vadon and Darrell Cavens , former CEOs of the online diamond sales platform Blue Nile. The company is headquartered in Seattle.

Initially, Zulily focused on selling maternal and child products, but has now expanded to multiple categories, including clothing, toys, pets, and electronic products.

Unlike other ordinary e-commerce platforms, Zulily mainly adopts the flash sale model. The platform's products are available on the shelves at 6 a.m. every day, and new product information is pushed to registered users via email or APP . More than 1,000 styles of products are available every day . The purchase period for all products is limited to 3 days, and the price of the products is more than 50% lower than the traditional retail price in the market . This model has successfully attracted many female consumers between the ages of 25 and 45. The mechanism of daily new products and regular elimination has also effectively improved user stickiness.

Zulily used the flash sale model to drive rapid growth in the company's performance . In 2013, Zulily's sales reached US$696 million .

On November 20, 2013, Zulily was listed on the Nasdaq in the United States , and the company's market value once exceeded US$9 billion .

However, Zulily's stock price fell 43% in 2015 as financial reports showed a sharp decline in the company's sales growth and a decrease in customer loyalty.

In May 2015, Alibaba purchased 4.8 million Class A shares of Zulily, increasing its original shareholding to 11.5 million shares and becoming Zulily's largest shareholder.

In August 2015, Zulily was acquired by Liberty Interactive, the parent company of QVC, the largest TV shopping company in the United States, for a total price of US$2.4 billion.

In May, Los Angeles-based private equity firm Regent acquired Zulily for an undisclosed amount.

It should be noted that Zulily has always had two problems and has been criticized by consumers.

First, the delivery time is too long. It is understood that Zulily does not stock and adopts the "JIT (Just-In-Time)" model. After the consumer places an order, Zulily purchases the goods from the supplier . This process causes Zulily's average delivery time to reach 17 days . It takes 11.9 days to transport from the supplier to the Zulily warehouse . In addition , the last mile delivery in the United States takes about 5 days , which means that it takes consumers 2-3 weeks to receive the goods.

Second, Zulily does not accept returns or exchanges . This platform principle greatly affects the user 's shopping experience, which is also an important reason why it is difficult for users to retain in the future .

However, later on, Zulily began to test the exchange service , informing users that they could exchange some products after purchase, including some branded clothing and household items (such as linens) , and the seller would be responsible for the shipping costs of the exchange.

It is sad to see Zulily go from its initial strong business growth to being acquired twice and now facing bankruptcy .

In addition to the company's recent layoffs and clearance sales of merchandise on its official website, Zulily will also close offices in three states: Washington, Nevada, and Ohio.

Over the weekend, the company's FAQ page mentioned a "bankruptcy" sale , and even on Wikipedia, the company was edited to say it was "soon to be out of business."

However, after foreign media published reports on the matter, Zulily deleted the statement.

Yien.com will continue to pay attention to whether Zulily can turn the crisis into safety in the future.

Zulily ’s predicament serves as a warning to sellers that the market is changing rapidly , and how to better avoid market risks is an important issue that sellers must always face.

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