Amazon is targeting the women's underwear market. Is this really reliable?

According to the Wall Street Journal, Amazon may begin to sell its own women’s underwear at competitive prices on its U.S. website in the next few weeks. Amazon's entry into the women's underwear market poses a challenge to the backbone of industries such as Calvin Klein and Victoria's Secret.

In February last year, Amazon quietly crossed the borders, began to make clothing, and launched 7 own fashion clothing brands. Amazon's own clothing brands have a total of 1,800 products on the market, ranging from men's shoes to women's scarves and children's clothing; the prices are moderate (men's suits are sold for less than $300); the style of clothing looks a bit like Uniqlo and Hu0026M.

Amazon

Jeff, vice president of apparel for Amazon's fashion department, once said in a meeting that Amazon has a blank space in the apparel field. When consumers want to buy new clothes, shoes, watches and jewelry, do they think of Amazon? Not yet? Well, Amazon needs to change this situation.

In fact, consumers will definitely think of Amazon when buying clothes. According to Bloomberg News, more than 55% of people will use Amazon (not Google) to search when they want to buy clothes. But it is only regarded as an e-commerce channel for purchase, not as a clothing brand.

What Amazon wants to do now is to let everyone know it again, not just e-commerce, but also a clothing brand. Fashion is a relatively high-margin business, which is expected to improve Amazon's performance.

The profit margin of each category of Amazon products

By selling other brands of apparel, including CK, Tommy Hilfiger, Levi's, etc., which are popular with consumers, Amazon has mastered a lot of consumer data and spied some opportunities in the entire apparel industry. E-commerce is indeed more Good at grasping consumer demand, leading consumer demand, and creating new consumer hot spots.

Amazon's pace of marching into fashion has not stopped, and this time it has hit the promising women's underwear market. According to a report released by PMR, a foreign market research organization, the revenue of the US lingerie market is expected to expand at a compound annual growth rate of 5.4% from 2015 to 2021, and the market size will reach 16.6192 billion US dollars by 2021.

At present, the underwear industry in the United States is undergoing rapid changes. Millennials, represented by the post-90s generation, prefer healthy and comfortable underwear, and Victoria's Secret has become less popular. When the industry is shuffling, it is the best time to seize the market by quickly launching products that are more in line with consumer tastes.

Before Amazon has launched its own underwear brand Iris u0026 Lilly in Europe, the market speculates that underwear brands in the US market are likely to be similar. As you can see from Amazon’s official website in the UK, Iris u0026 Lilly’s bras are lower than the prices of general brands, and their styles also cater to the habits of young lovers. Many of them do not add steel rims, do not add chest pads and adopt smooth super Fine fibers bring a comfortable experience to consumers.

Amazon

Most of the bras of the two major brands, Victoria's Secret and CK, cost around US$40 and US$20, and the styles are more fancy. Amazon's cheap bras can make up for the current low-end market.

But Amazon's entry into the underwear market has many hidden dangers. First of all, is the low-end underwear market very promising in the current era of consumption upgrade? The answer is quite uncertain. According to a survey in the United States, based on the price range, mid-range bras are expected to contribute the largest market share in 2021, rather than the low-end. The compound annual growth rate of high-priced underwear is 6.8%, the highest among several price ranges. The market trend is to prefer mid-to-high-end products. Whether Amazon's low-end cheap abacus can work well is unknown.

Secondly, although the retail sales of apparel and accessories in e-commerce continue to rise, surpassing physical retail, the growth rate of e-commerce sales of apparel has begun to slow down, with a year-on-year increase of 17% from 2013 , Has become a year-on-year growth of 13.7% in 2016, and is expected to continue to slow down in the next two years. The dividends of e-commerce are gradually disappearing, and how Amazon responds is a problem.

In addition, we usually think that women are the main factor leading the shopping trend, but according to a survey by the market research company BI, 40% of American male consumers (aged 18 to 34) said they Only 33% of female consumers want to shop online for all the necessary supplies. It seems that American women don’t like e-commerce so much either.

Especially underwear is a special category. Usually, women need to try them on before they know whether the underwear number is appropriate and the quality of the underwear is satisfactory. It is difficult for women to make up their minds to buy only through the online profile and a few photos of the model. For some consumers who are not familiar with the newly launched underwear brand, it still needs the presence of offline physical stores and the help of shop assistants. In this regard, Amazon is far inferior to underwear brands such as Victoria's Secret and CK.