Amazon is officially closing Quidsi, which ties a number of shopping sites, including Diapers.com and Soap.com, among others. Quidsi is one of the company's biggest acquisitions to date, having bought it for around $545 million six years ago. Amazon confirmed the shutdown on Wednesday, March 29.
Shuttering Quidsi will pronounce 263 layoffs, as per a notice filed with New Jersey. Some of the employees, however, can apply for different roles in the company, according to Bloomberg.
"We have worked extremely hard for the past seven years to get Quidsi to be profitable, and unfortunately we have not been able to do so," Amazon said in a statement. The statement adds that Quidsi's software development team will reroute their focus on building the technology for AmazonFresh, the company's grocery delivery service.
Quidsi Acquisition
It's not clear when the sites will go offline. Quidsi is presently Amazon's fourth largest acquisition, as Recode notes. The buyout was the culmination of a tense price war between companies hoping to kick the Jersey City-based company out of business. Marc Lore, Quidsi's cofounder and then-CEO, became part of Amazon for a few years following the inked deal, although it's known in the tech huddle that Lore didn't enjoy much of his stint inside the company. He went on to launch an Amazon competitor in 2015, Jet.com, which Walmart bought last year for $3.3 billion.
Quidsi Not Profitable, Says Amazon
Quidsi's specialization was in certain categories, such as household items and baby products, as Amazon offered an infinite array of inventory, but the allure of sites such as Diapers.com has waned, especially since Amazon, the largest e-commerce retailer globally, has become the de facto venue for everyone's online shopping needs.
Quidsi's share of baby product sales decline to 2 percent in Q1 2017, which is a definite low from 9 percent in the same period in 2014, as per compiled data by Slice Intelligence. But Amazon's brand experts will continue finding a way to sell inventory as it pivots to pushing its grocery division, the aforementioned AmazonFresh.
A Competitive Move Perhaps?
But the decision might also have tinges of competition entrenched just beneath the surface. Maybe Amazon was trying to show Lore, who's aiming to conquer the U.S. e-commerce market, that Quidsi, once fought for and bought at a steep price point, is not needed anymore. Whether that will stifle Lore is a separate discussion reserved for another day.
In addition, Amazon might have dropped Quidsi altogether because it's hoping to pull Quidsi users into its own ecosystem, at least according to Matt Sargent of Frank N. Magid Associates.
"Amazon wants to be the single easy place to go for everything," offers Sargent. He notes that the timing of the shutdown is intentional since Amazon is gearing up for a big push for its grocery division.
Thoughts about the Quidsi shutdown? Do you think Amazon should have just kept it within its ecosystem? Feel free to sound off in the comments section below!
