I like to see the good in people and companies. Sometimes, unfortunately, my optimism is misplaced. As it seems is the case with Joybuy. Speaking to several suppliers ahead of their European launch a few weeks back, they were understandably nervous that the eCommerce giant’s arrival could spark a price war with Amazon, which would subsequently end up causing collateral damage to all toy retailers, physical and online. I had hoped Joybuy might at least decide to get their feet under the table and scope out the lie of the land before committing to an aggressive discounting strategy – how wrong I was.
The opening salvo appears to have been fired this week. Mike O’Shea from Wicked Uncle contacted me to alert me to the fact that Joybuy is selling the Lego Rainbow Minifigs puzzle at £7.49 – half the RRP (based on the Lego website) and significantly undercutting Amazon, who were at £11.94. I will happily quote Mike’s response to this development, as I am sure he speaks for many of us: “So, a ‘cheap as chips’ Chinese company comes to the UK, operates at a loss, destroys margins, retailers and jobs, while our High Streets are filled with charity shops, coffee shops or vacant lots with sage brush blowing down the road. An absolute disaster. They may succeed, they may lose a few billion and fail, but either way they are killing jobs and toy shops. We are an online retailer, but we are aiming to sell high service and interesting, unique products, not just cheap. This way, no-one makes any money. Exactly the sort of thing our government ought to be stopping to protect our own jobs.”
I wonder how Lego feels about this? Although whatever their reaction, I guess they are powerless to prevent it (legally at least). Although now Joybuy has set its stall out, maybe the gloves are off – if I was a supplier, I would be seriously considering how extensively to trade with them, knowing the damage it could potentially do to my relationship with other accounts. I’m guessing they won’t exactly be in contention for the Online Retailer of the Year award either, based on this opening gambit.
Joybuy aren’t the only business on a mad one this week – it must be the season for it. GameStop decided it would launch a bid to buy eBay, a company four times its size. Unsurprisingly, eBay shot that idea down pretty quickly. You have to admire the ambition, while at the same time wondering what made them think they could genuinely afford to go through with such a move.
Meanwhile, Mattel has faced agitation from a shareholder, Southeastern Asset Management (let’s call them Sam…), which has sent a letter to Ynon Kriez stating that the company would be better off if it was owned by a private equity firm, a toy competitor or a media company. Really Sam? Naturally, they’re entitled to their opinion, but let’s take a moment to unpick their (un)helpful suggestion.
Read the rest here.
