Amazon’s Prime Day Is Growing Increasingly Irrelevant

(Photo Credit: David Ballew/Unsplash)
(Photo Credit: David Ballew/Unsplash)

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What if they threw a huge online sale, and nobody came?

Yes, Tuesday marks the beginning of Prime Day, the Amazon-invented discounted shopping event designed as a Black Friday-style feeding frenzy in mid-summer. But shareholders have lost their zeal for the Bezos-invented holiday.

Cut Down In its Prime

Amazon’s first Prime Day took place in 2015, and for five years sales growth for the event’s 48-hour period swelled sumptuously. Prime Day in 2020 marked 30% sales growth over the previous year (we’ll let you figure out what prompted that). Since 2020, however, sales growth has slowed, and data analysis from Bloomberg suggests shareholders were losing interest before Prime Day started losing steam.

Per Bloomberg, Amazon’s share price has fallen on the week of Prime Day every year since 2019. That’s because Amazon may be synonymous with e-retail to consumers, but the company makes most of its money from cloud computing wing AWS:

  • In Q1 of this year, AWS posted an operating income of $5.1 billion, more than the rest of the company earned. This, plus the current AI hype-cycle, make AWS look ever more attractive to shareholders Eric Clark, portfolio manager at Accuvest Global Advisors, told Bloomberg.
  • Meanwhile, Amazon’s e-retail business faces fresh competition for startlingly cheap online shopping from Chinese upstarts Shein and Temu. Shein is moving onto Amazon’s patch by layering third-party sellers into its app.

The Highest Form of Flattery…: Not only is Shein overtly imitating Amazon’s e-commerce strategy, but some sellers on Temu also appear to be replicating specific Amazon sellers’ storefronts. Wired spoke to dozens of Amazon sellers in China who found product listings identical to their own on Temu, but selling for a much lower price. One seller told Wired he’s considering pursuing legal action, but the costs would make that difficult. “It would be great if Amazon can help us small sellers,” the seller said, adding: “They must have more resources.” Even with Prime Day waning, he’s probably right there.