Amazon To Close Buy VIP

The online retailing giant is to close its exclusive shopping club.

Online retailing giant Amazon is to close Buy VIP, the shopping club it acquired seven years ago.

The company had paid €70 million for the Spanish company that at the time had 6 million members and a turnover of €130 million, and focused on selling out of season stock at discounted prices.

It had high hopes for expansion, but a spokesman said the business had remained unprofitable.

Retailing analyst Mirco Warschun at AT Kearney said Amazon had failed to attract the very top brands that could be sold to a select customer list.

Buy VIP had been relatively successful in Germany: a study by consultants EY showed that 20 ercent of online shoppers had visited the site. Some 17 percent of shoppers meanwhile had visited a similar club run by Rocket Internet startup Zalando, called Zalando Llounge, and ebays brands4friends had attracted 16 percent of online shoppers. Germany's Otto group has also managed to set up a successful site Limango, which hit sales of €152 million last year.

Amazon’s key mistake appers to have not curated the contents of the site carefully enough. Customers of these upmarket shopping clubs want a few, carefully selected offers. Amazon flooded them with deals. Amazon also offered the service to its Amazon Prime customers, and undermined its air of exclusivity.

 

Florian Kolf leads a team of reporters covering the retail, consumer goods, luxury and fashion markets. To contact the author: [email protected]