Somewhere in China is a small business operation working as a broker to bigger manufacturers, or stitching and sewing capri pants for sale on Amazon’s Marketplace. To say their livelihood depends on the U.S. consumer would be an understatement. They are the new neighborhood shop, only they’re based in Guangzhou. Thanks to e-commerce platforms, led by Amazon, they will help accelerate putting American retail out of business.
Most of the shelves of American retail stores – from Lowes to Old Navy – are full of items manufactured in China. But who needs them? All one has to do is buy online, sight unseen. Do you need these retail stores anymore?
Giant corporations like The Gap, owners of Old Navy, may be able to withstand declining in-store sales. Those who are not listed on the NYSE, or have private equity backing, will struggle against e-commerce’s direct-from-China trend. To survive into the future, they will have no choice but to create a website and have their buyers order direct from Asia. There won’t even be a need for warehousing.
All e-commerce sales priced under $800 come into the country duty-free under a tariff rule known as de minimis. Most of it is coming from China. Some of it is from those small Chinese players who sometimes do knock-off versions of American brands and underprice the originals. Even Amazon admits to this.