August 09, 2017

In international trade, the practice of dumping – exporting product at a predatory price to capture market share – is usually associated with aggressive countries intent on moving into a national market at any cost.

Are we now seeing a commercial enterprise with country-sized market muscle get into the dumping business?

I’m referring to the on-line behemoth, Amazon.com.

In the politicized trade arena, governments often accuse each other of dumping. Earlier this year the Trump administration took up the antidumping cause against China on behalf of US steelmakers.

Such grievances can owe as much to political expediency as to unfair trade practices. But there is no doubt that dumping is a genuine threat that has been perpetrated successfully by aggressor countries.

For example, it is widely acknowledged that a dumping strategy executed by Japanese companies in concert with the country’s government effectively destroyed the domestic TV manufacturing industry in the US. Between the late 1960s and 1980s, well known American companies such as Philco, RCA and Westinghouse either exited the business or were gobbled up by foreign enterprises.

Amazon is, quite rightly, one of the most admired companies in the world. Its capacity for innovation and competitive ingenuity is remarkable. This is one of a rare breed of companies that single-handedly defines a market.

But that market power, coupled with the enterprise’s vast resources, can also be used to undercut competitors in a manner reminiscent of nations that have used predatory pricing policies to smother commercial opposition...

Read Article on Yossi Sheffi's LinkedIn Influencer Blog