• Significance of Amazon’s Acquisition of Whole Foods Market

Significance of Amazon’s Acquisition of Whole Foods Market

Amazon is always associated with books and Kindle. That may be about to change and items such as avocados, quinoa and kale may pop up when we think of Amazon as the largest online retailer has completed the acquisition of Whole Foods Market, the American supermarket chain carrying organic and clean products. Consumers of organic food and green living particularly welcomed the news as Amazon announced significant price cuts at Whole Foods Market right after the acquisition.

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Prices at Whole Foods Market before and after the acquisition by Amazon

Since the 1980s, Whole Foods Market has been well-known for its leading position in the healthy food sector in North America as it stocks food items free from artificial preservatives, colourings, flavours and hydrogenated fats. In recent years, the healthy food market has become increasingly competitive–Walmart has rapidly expanded their organic sections and even became the largest organic retailer in 2015. To recover lost ground, Amazon offered more affordable prices at Whole Foods Market. In fact, this price cut strategy boosted the customer traffic flow by 25% immediately.

The organic food industry has grown exponentially in the last decade in North America and Western Europe. With increasing demand, costs and retail prices can drop and hence attract more customers. It is exactly the same case for Green Common, Hong Kong’s first green living emporium under Green Monday. The concept was relatively new to local consumers when we opened our first branch in 2015. Given our scale, we had limited bargaining power with vendors and suppliers. “Our purchase could not reach the minimum quantity of some suppliers at that time,” explained David Yeung, co-founder of Green Monday and Green Common. “We were unable to bargain for better deals for our customers.” As Green Common has opened more stores in the territory, our purchase order from suppliers increases and we can bargain for a better price. Meanwhile, some of our suppliers are scaling up rapidly due to the rising demand for plant-based food. These two factors facilitate cost reduction. Consequently, we can decrease the prices of our items and this is our first step to make plant-based foods more affordable for consumers.

Amazon and Whole Foods Market have obviously created a significant impact on the health and natural food market. When the “green” choices become more affordable and abundant, consumers are more inclined to ditch junk as well as heavily processed food and shift to healthier alternatives.

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