Is full hosting being tested internally? Amazon: No relevant information has been received yet

The trend of full hosting has been blowing for nearly a year, and it is getting stronger and stronger. Various e-commerce giants have announced the launch of this model. There are even rumors that Amazon has been testing full hosting internally. Has the world of cross-border business changed?

Is the full hosting being tested internally? Amazon official: We haven't received any news

Since Temu launched the fully managed service last year , a new revolution seems to have taken place in the cross-border trading industry. Although this new model has been criticized by many sellers, new players are still coming in one after another. Even the "Four Little Dragons" have followed the new trend and announced the fully managed service model of their platforms.

Previously, there was a lot of discussion about whether Amazon would enter the full hosting market, and recently this discussion seems to have been concluded. Multiple media reports said that Amazon is testing full hosting internally, and some sellers broke the news that a group of big sellers have received official invitations from Amazon, and some industry observers even said that Amazon's full hosting will be launched by the end of this year at the latest.

Based on these voices, Yien.com verified with relevant people from Amazon, who said they had not received any relevant information .

The trend of full hosting is getting stronger and stronger. More and more sellers think that this is the general trend, so the news of Amazon's entry is rampant. Why do people have such an idea? It may be inseparable from Temu.

Multiple market data show that the surging Temu has brought considerable pressure to Amazon.

Since its initial launch in the United States last September, Temu APP has maintained high download volumes and has topped the monthly download charts of various app markets many times.

According to data from Insider Intelligence, in January this year, the total value of Temu 's merchandise reached nearly $200 million. Although this is only a small fraction compared to Amazon , as a new platform that has opened 33 sites in less than a year, Temu's offensive is not small.

Meanwhile, market analysis firm GWS found that Temu has added nearly 10 million daily users this year, with a current user base of about 16.5 million , and the number of new users is still growing . In contrast, Amazon 's daily active users have dropped from 54 million to 46 million . In terms of browsing time, Temu users spend an average of 20 minutes a day, while Amazon users spend only 12 minutes.

From the user's perspective, Temu, which captures the consumer's mindset of low prices, does make Amazon feel a little bit of a crisis. But if we use this as a reason to infer that Amazon will enter the full hosting market, it is not convincing enough.

Seller: Amazon is doing full-service management, aren’t you thinking straight?

Is Amazon testing full hosting internally? Some sellers think it is possible, but more sellers still hold a negative view.

“——It doesn’t seem very realistic . Amazon doesn’t need to do full-service hosting. Aren’t the advertising and storage fees attractive?

——No , it is very expensive for Amazon to hire its own customer service . No seller can afford the quotation given by the full-service service .

——After the full custody, the sellers will turn over the tables . There are so many sellers on Amazon, will it mess around?

——If you dare to take this lead, the platform will just have to wait for its sunset .

——Amazon’s full-service hosting service cannot gain any advantage over the Big Four.

——If Amazon takes full custody , local companies will probably be wiped out . How can the supply price be compared with China ? Will the regulatory authorities agree?

..."

In the eyes of most sellers, Amazon's full-hosting service is "tantamount to seeking death."

Seller Vinson said, " The sellers' commissions, advertising fees, storage fees, and logistics fees are already enough to make Amazon fat . If they now implement full hosting and abandon the sellers, can the platform afford it ? Moreover, in order to compete with Temu and others for the full hosting market, the initial cost investment must be high, and in the end there may be no benefit. Amazon should be able to calculate this accurately."

Indeed, the revenue generated by third-party sellers alone for Amazon is not low.

According to the financial report released by Amazon yesterday , as an important pillar of Amazon's profitability , its advertising revenue reached US $10.68 billion in the second quarter , a sharp increase of 22% year-on-year (US$8.8 billion in the same period last year) .

Revenue from third-party seller services grew 18% to $32.3 billion, with third-party sellers accounting for 60% of total sales, a new record .

If Amazon opens up a full-hosting business, it will inevitably have an impact on third-party sellers on the platform. How will Amazon balance full-hosting and third-party sellers on the platform ? Will Amazon give up third-party sellers who bring it the majority of revenue?

" What is certain is that if the news is true, not only the sellers, but also countless Amazon service providers will be 'down' because of this," Vinson told Een.com.

However, Vinson also said, " If the platform needs full custody, there will definitely be a corresponding survival space for full custody , and it will not put sellers 'to death'. If there is really no 'way out', full custody is not impossible to try , but it must be judged in combination with products , cash flow , risk tolerance , supply chain , etc. ”

Vinson also joked: "If we do full hosting, there will be no spoof removals, right? Can the platform also solve the problem of being copied by others?"

In addition to considering platform sellers, Amazon may also have to think about how to deal with regulators.

Amazon’s self-operated business has encountered many setbacks. Does the full-service agency dare to join in?

In fact, since the launch of full hosting, there has been no end to the voices in the cross-border circle that it is Amazon's self-operated derivative product.

“ ——Amazon’s self-operated business is the manufacturer supplying the goods and Amazon’s endorsement, which is the earliest full-service management .

——Amazon has its own business, so it doesn’t really need full trusteeship, right? ”

Most sellers believe that Amazon Self-operated is the predecessor of full-service hosting .

Unlike the current full-hosting, Amazon's self-operated business is a business- to-business relationship between sellers and Amazon, where sellers do not need to worry about sales and operations . However, Temu and other platforms are operated by sellers, where the number of products to be put on the shelves is determined by the sellers, and the number of products sold is determined by the market, so profits naturally follow sales.

" I do self-operated purchasing for Amazon, so I don't need to be responsible for operations. I just send them whatever products they need and if the price is right . "

It's not just the self-operated models that are similar. In 2019 , Amazon launched a sales hosting plan ( Sold by Amazon) in which the platform has pricing power . However, it was boycotted by sellers due to its low pricing , and was accused of violating antitrust laws by US regulators . It was eventually ordered to close , and Amazon also paid a fine of $2.25 million.

Amazon's self-operated business has also been repeatedly accused by regulators in the United States and Europe of violating antitrust laws, biasing traffic towards its own products, and setting prices that are not conducive to fair competition in the market.

"Maybe Amazon is also jealous of the 'leek field' of full hosting, but the antitrust agency is watching too closely , and self-operation has already exhausted them . And is Amazon going to go backwards and imitate others, abandoning businesses such as advertising ? "

As of now, full hosting seems to have become the mainstream trend in the cross-border e-commerce industry this year . Even TikTok Shop has announced that it will launch full hosting in the United States this month.

The full-hosting model targets sellers of such products, which are large in volume and low in price. Price competition in the market may intensify as a result, and the survival space of some sellers may be squeezed . However, " Amazon's low-price downstream market may be diverted , but if it wants to shake up the mid-to-high-end market, no platform, including Temu, can do it in the short term . "

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