“What is brand in the Amazon age?”

#AmazonElectronics

“... what is brand in the Amazon age?” Scot Wingo, executive chairman of ChannelAdvisor, an e-commerce consulting firm, told The New York Times in response to the new industry gaining traction as a result of Amazon’s platform.

In the face of sky-high prices from the most renowned electronic gadget companies - Apple, Microsoft, Sony and more - China-based brands like RAVPower, TaoTronics and VAVA are making everyday electronics that sell at the fraction of the price of the top brand names. Typically, the high prices for things like tablets and smartphones weren’t a strong deterrent, especially with most sellers offering financing options. But, less expensive electronics sales have been increasing over the past couple years, making the tech world consider whether low-priced competitors are actually taking some market share away from the seemingly insurmountable tech giants.

The simple answer is “yes” - most families operate on a budget and if they can get the same functionality for a lower price, that lower price will often supercede a specific brand name.

Walmart is the greatest example of this.

The Waltons are the wealthiest family in the world because they manufacture and supply from extremely low cost sources to keep prices low. And no matter how much you may want to fight shopping at Walmart, at some point, everyone goes. Why? Because, why pay more at one store for the (effectively) same thing at another? The smart shopper will typically pick the lower costing item, regardless of source, and daily household electronics are no exception.

So the question is whether a new industry is being created, starting with these China-based brands that sell daily electronics at a relatively low cost. It seems yes: less expensive competitors are going to play the volume game and likely gain significant traction and market share in the coming years.

The industry may be new, but the capitalistic pattern is not. It will be interesting to see the extent to which this new industry pushes those top tech brands to innovate their products and prices, and this will depend on the extent to which those competitive low prices outweigh brand names.