Amazon: No plans to cut private label brands, will continue to invest

Last week, foreign media reported that Amazon has begun to significantly reduce the number of products sold under its own brands amid weakening sales , and has discussed the possibility of completely withdrawing from the private label business to reduce the pressure of regulation by government agencies .

Amazon also officially refuted this report and stated that it will continue to invest in the construction of its own brand .

Amazon said, “We have never seriously considered closing our private label business, and we will continue to invest in this area, just as many of our retail competitors have and will continue to do for decades. ”

The report said Amazon's retail sales have slowed significantly this year, and sales of many of its own- brand products have not increased , so the company decided to scale them down.

Over the past six months, Amazon’s leadership has also directed its private-label team to cut its product listings, while also discussing reducing its in-house brand assortment in the U.S. by more than half .

Just last year, Amazon Global Stores CEO Doug   Herrington and General Counsel David   Several Amazon executives, including Zapolsky, have been open to shutting down private-label brands.

Amazon 's private-label business has long been controversial, with third-party sellers on the site complaining about how it's promoted and at the heart of investigations by regulators in the United States and Europe into alleged abuse of its dominance in online shopping.

In 2020 , the European Commission accused Amazon of using its size, power and data to promote its own products at the expense of third-party sellers and to give advantages to its own brands in search listings and other ways .

Amazon has also been accused of using internal sales data to filter out best-selling products from third-party sellers , allowing them to copy products .

To avoid huge fines and other penalties , Amazon told European and American regulators that it would no longer use seller data for its competing retail businesses and private-label products.

Private label products reportedly account for approximately 1% of Amazon's revenue and include its AmazonBasics generic product line and many other products. As of 2020, Amazon has 243,000 private label products across 45 different private label brands . Its private label business dates back to 2009 and has expanded over the years to include a variety of consumer product lines as well as apparel and home products.

According to statistics , in the just-concluded Amazon Prime Day, three of the top five best-selling products were Amazon's own brands . In several key categories, Amazon's own brand products accounted for 64% of smart home device purchases, 43% of consumer electronics, 38% of household necessities, 38% of grocery stores , and 30% of clothing and footwear .

Since the beginning of this year, the e-commerce market has slowed down across the board, and Amazon's first quarter financial report also announced its current loss situation. In recent months, Amazon has also stopped the expansion plans of multiple sites, which shows that its strategy to reduce losses is constantly adjusting. Although this report was denied, the market is ever-changing, and it is still unclear whether this response is a consolation or a true fact.

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