A fascinating new expose by The Atlantic explores the rising number of semi-anonymous, Instagram-native e-commerce brands that have no inventory, no quality standards, and no ethics, but that are also, apparently, thriving.
Getting into how these amorphous middleman entities operate, why they succeed, and what exactly it is that they carry, the story takes a look at a retail model that, as it so eloquently states, “squirts hot dogs on [its] ketchup and mustard.”
Named, presumably, for the sounds one makes when falling down stairs, Gonthwid, Hzijue, Romwe, HypeClothing, Manvestment, Ladae Picassa and Kovfee are all semi-real retailers that were “pulled into existence by the power of Instagram and Facebook ads combined with a suite of e-commerce tools based around Shopify” and “are distinguished primarily by their loose relationship with the truth about themselves.”
Profiling a self-described “17-year-old entrepreneur” named Rory Ganon, the story not only details the process of how these “brands” make it into the retail ecosystem, but how cynically someone can capitalize on the existence of that ecosystem.
In the course of the story, Ganon builds a store on Shopify, finds a niche (he picks “lions,” because, as the story lays out, the niche doesn’t matter so long as you have one, and why not lions?), lays out a Facebook and Instagram marketing strategy and basically hits the go button, launching a web store complete with as much data and analytical power as any large retailer, but without any inventory whatsoever.
He then uses AliExpress — a Chinese-based Alibaba company — to find sellable products, which are then drop-shipped from whatever shady Chinese factory they’re made in.
And because synergy and cynicism are essentially inextricable in the age of social media, “there is an app that plugs directly into Shopify called Oberlo, which allows anyone to pull products directly from Aliexpress,” allowing any store to claim inventory they don’t actually have.
(The plug-in, according to the story, has processed 85 million items, which means that there are 85 million terribly-made things on the fast-track to a landfill, but, you know, commerce.)
But what’s perhaps most intersting (or troubling), as the story mentions, is that this model essentially upends the modern the supply chain as we know it, putting the onus of design on factories instead of brands.
You can read more about it at The Atlantic.