Amazon buys European discount club

Online retail giant Amazon has just confirmed it has purchased BuyVIP, a European online sales club that gives its members discounts on leading fashion brands. With Christmas just round the corner, what could Amazon be plotting?

A few months ago eBay ran one of its largest advertising campaigns in the UK.

This was a direct attempt to get people to search for first-hand designer brands at discount prices for Christmas and beyond.

eBay has expanded the number of accounts selling outlet fashion clothes.

BuyVIP was founded in 2006 with the intent of providing its members with large discounts for global brands including Calvin Klein, Diesel and Gucci.

The discounts, which were as much as 70 per cent, were offered to its six million members from all over Europe.

Amazon didn’t reveal how much it paid for BuyVIP but it did say the purchase would be completed before the end of the year – as Amazon attempts to become even larger in Europe.

This, coupled with Amazon’s new grocery delivery service, should help secure it a stronger foothold in the European online market.

Ecommerce sites are made or broken based on two main criteria: price and brand. If you’re the cheapest most customers will hit “Add to Basket” much quicker; but if the brand isn’t trusted, this won’t help.

Amazon is already established all over Europe and is generally the cheapest for just about everything – and it provides free delivery.

It could be that Amazon is working on a new batch of stores that brands can use to create outlets. This would directly compete with eBay but could Amazon pull it off?

Amazon was originally a book retailer and then added hundreds of other lines . All products were first-hand until a couple of years ago when it allowed users to sell their old books, CDs and DVDs. So Amazon is thought of as a retailer primarily, whereas eBay is an auction site.

This, along with massive discounts, could be the reason why Amazon gets more customers than eBay in outlet sales. But the real winners will be the customers who just sit back and enjoy the large discount on their favourite brands.