Overstock.com 2015 Annual Report Download - page 16
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The online retail market is rapidly evolving and intensely competitive. Barriers to entry are minimal, and current and new competitors can launch
new websites at a relatively low cost. We currently compete with numerous competitors, including:
• online retailers with or without discount departments, including AliExpress (part of the Alibaba Group), Amazon.com, eBay, and
Rakuten.com (formerly Buy.com);
• online specialty retailers such as Blue Nile, Bluefly, Jet.com, Wayfair, Zappos.com, and Zulily;
• private sale sites such as Groupon, Living Social and Rue La La;
• furniture specialists including Ashley Furniture, Bob’s Discount Furniture, Havertys, Raymour & Flanigan and Rooms To Go;
• traditional general merchandise and specialty retailers and liquidators including Barnes and Noble, Bed, Bath & Beyond, Best Buy,
Costco Wholesale Corporation, Crate and Barrel, Ethan Allen, Gilt, Home Depot, HomeGoods, Hudson's Bay Company, IKEA, J.C. Penny
Company, Kirkland's, Kohl's, Lands' End, Lowes, Macy’s, Nordstrom, Pier 1 Imports, Pottery Barn, Restoration Hardware, Ross Stores, Saks
Fifth Avenue, Sears Holding Corporation, T.J. Maxx, Target Corporation, Wal-Mart and Williams-Sonoma, all of which also have an
online presence; and
• liquidation e-tailers such as SmartBargains.
The intense and increasing competition we face from a wide variety of competitors, many of which have substantially greater resources than we do,
and some of which are willing to incur losses in order to increase revenues, may result in our pricing of products or services below prices at which we can
make a profit, may cause us to lose sales entirely, and may have a material adverse effect on our business.
The online retail market has become far more competitive as traditional and online retailers continue to develop and improve services that compete
with our services. Many traditional manufacturers and retailers have added or improved their e-commerce offerings, and we expect that more will do so and
that they will all continue to improve their offerings. Traditional and predominantly online retailers may create proprietary, store-based distribution and
returns channels that we may be unable to match, and may also be able to create their own traditional distribution and delivery services. Competitive
pressures, including same-day delivery capabilities, from any of our competitors, many of whom have longer operating histories, larger customer bases,
greater brand recognition and significantly greater financial, marketing and other resources than we do, could have a material adverse effect on our business.
In addition to the types of retailers described above, in many areas we face competition from numerous other businesses, many of which may
specialize in the type of business in which we are competing. Our furniture offerings compete with more than 100 online retail furniture websites, in addition
to many more traditional furniture retail specialists. We face the risk that potential furniture and other customers will choose traditional retailers where they
can physically examine products prior to purchase. Our Supplier Oasis service faces substantial competition from third party logistics providers as well as
from Amazon and eBay and other e-commerce service providers having substantially greater experience and resources than we have. We are currently
offering insurance products, and as such face competition from small and large established businesses with substantially more experience.
Our majority-owned subsidiary Medici, Inc., d/b/a tØ.com, is competing against a variety of companies with substantially greater financial resources
and experience in financial technology than Medici has. The number of competitors in this area and the resources being devoted to the area by competitors
are growing rapidly. We may be unable to compete successfully against these competitors or others that may not yet have publicly announced their business
plans in this area.
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