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Zulily Shuts Down, Blames Amazon Amidst Antitrust Battle

By  |  January 3, 2024

Online retailer Zulily, once a thriving “flash sale” platform known for its mom-centered offerings, has officially ceased operations, citing Amazon’s alleged anticompetitive practices as a major factor in its downfall. The confirmation of the long-speculated liquidation came via a statement on Zulily’s homepage, where the company announced an “orderly wind-down” and its entry into an assignment for the benefit of creditors (ABC), a bankruptcy alternative.

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    Founded in 2009 by industry veterans Mark Vadon and Darrell Cavens, Zulily gained prominence for its unique approach to e-commerce. The platform, which went public in 2013 with a valuation of $2.6 billion, was acquired by QVC (now Qurate) in 2015 for $2.4 billion. The acquisition, seen as a defensive move against Amazon by The Wall Street Journal, marked the beginning of a tumultuous period for Zulily under its new ownership.

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    Struggling with losses over the years, Zulily was eventually purchased by Los Angeles-based private equity firm Regent in May 2023 for an undisclosed amount. At the time, Regent’s chairman, Michael Reinstein, expressed optimism about the company’s future, declaring that it would “return to its entrepreneurial roots as an independent business.” However, the optimism was short-lived, as Zulily’s doors closed less than eight months later.

    Read more: Amazon Challenges EU’s ‘Large Online Platform’ Law

    Reports indicate that Zulily had been facing financial challenges for some time. In December, Geekwire revealed the closure of Zulily’s fulfillment centers and Seattle headquarters, accompanied by the layoffs of hundreds of employees. Simultaneously, Zulily filed an antitrust lawsuit against Amazon, accusing the e-commerce giant of engaging in coercive practices.

    According to the lawsuit, Amazon allegedly pressured vendors who sold on both platforms to increase their prices on Zulily, preventing them from undercutting Amazon’s pricing. The lawsuit claimed that some sellers were threatened with expulsion from the Amazon Marketplace, jeopardizing their survival. Zulily argued that within a year, nearly half of the suppliers who sold on both Amazon and Zulily terminated their relationships with the latter.

    The demise of Zulily raises questions about the impact of Amazon’s dominance on smaller e-commerce players and the challenges they face in coexisting with the retail giant. The antitrust suit against Amazon serves as a testament to the growing concerns about unfair competition in the e-commerce industry, prompting calls for increased scrutiny and regulation to ensure a level playing field for all market participants.

    Source: JCK Online