Clothing retail is unstoppable.

At the end of October this year, Amazon platform merchants revealed that clothing took over the home in the first half of the year, has become the largest category of Amazon, and the market consumption enthusiasm is expected to continue throughout Q4 and next year. Taking this as a reference, the value of the clothing consumption sector seems to have been released.

As early as the beginning of the year, Kaidu consulting expressed its view that the global garment market will grow at an annual rate of 3.9% and the market value will increase by US $64 billion in five years.

01

Old and new

As a consumer sector greatly affected by the epidemic, the change of market sentiment is closely related to the progress of epidemic prevention and control. The outbreak of the epidemic has accelerated the formation and penetration of online consumption habits. The epidemic lasting for nearly two years has made Amazon's clothing sales account for about 35% of the total online clothing sales in the United States in 2021, officially surpassing Wal Mart and becoming the largest clothing retailer in the United States.

At this stage, with the re launch of the North American vaccination project, the travel confidence of ordinary people has increased, and the sales of iconic products such as swimsuits and jeans have increased earlier, which has sent a signal to the continuous warming of clothing consumption enthusiasm. According to the data released by NPD, as of June this year, the sales of apparel products in the United States had increased by 46% compared with the same period in 2020 and 7% year-on-year in 2019.

In this context, the competition of clothing retailers is more intense.

In order to regain the territory eroded by Amazon, on the one hand, Wal Mart declared a high-profile war in the field of mass clothing. For example, in response to Amazon's two-day prime day promotion, in June this year, Wal Mart aimed at the opportunity of Amazon's activities and launched deals for days promotion activities that started earlier and lasted longer. Consumers can buy their favorite clothes at up to 60% discount in Wal Mart's online and offline stores, The categories of discounted goods are also extended to puzzles and wireless vacuum cleaners.

We should know that Wal Mart itself is famous for its low price, and the large activity discount shows Wal Mart's competitive heart in the clothing market.

On the other hand, Wal Mart has increased its investment in previously weak but more profitable brand clothing, such as attracting famous fashion designers such as Langdon Maxwell, and developing co branded jeans with actress Sophia vigara.

It is still the "cake" of the huge clothing market that can attract the two giants in the world to compete. According to the data of CITIC Securities, the size of the U.S. clothing market has reached US $107.2 billion in 2020. As the impact of the epidemic continues to weaken, the long suppressed travel demand in North America and other regions is expected to drive consumers to "retaliatory" clothing consumption.

02

The outcome is decided

It can be predicted that the struggle between Wal Mart and Amazon will continue. In this process, consumers will get more high-quality products and concessions.

However, for Amazon, from the initial start of books to toys, 3C electronics and home furnishings, and then to clothing becoming the largest category of the platform this year, Amazon's layout of the clothing market is both natural and inevitable. Although Wal Mart has the aura of the world's largest retailer, it has also accelerated the layout of online business, However, under the mature e-commerce operation mode and business ecology of Amazon, it has fallen behind in the clothing competition between the two.

Specifically, Amazon has two insurmountable advantages:

First, continuous user belief and huge traffic advantage. The core reason why Amazon can grow into the world's largest integrated e-commerce e-commerce is that it always adheres to "customer first". At first glance, it sounds rather empty. Some examples may be more intuitive. For example, this concept has been repeatedly reiterated in letters to shareholders for 24 consecutive years, taking customer satisfaction as an important content of the report. Another example is the high weight of bad reviews and low return threshold on Amazon platform.

Thanks to this development principle, Amazon has 300 million active users and 50 million prime members. These 300 million people are not only online, but also often come with demand and continuous consumption power, making the order conversion rate of the platform higher.

Second, comprehensive and top e-commerce infrastructure. Amazon has said in public more than once that it has positioned technology companies since its birth, but it just happens to do retail. Over the past 25 years, Amazon's scientific and technological strength has continuously evolved, enabling the platform environment and product capabilities, such as the famous FBA logistics warehouse, prime member service, Alexa, echo, AWS, Amazon locker, etc., to comprehensively optimize the sales and shopping experience of platform merchants and end consumers from "generating shopping ideas" to "delivering products", And continue to create new business value.

Another invisible advantage is that Amazon can obtain a huge user base and consumer data in the service process for product and technology optimization. For example, Amazon can experiment and optimize the product price with the background algorithm to find the best rather than the lowest price. In the same time period, when Amazon can adjust the price of the same commodity 9.2 times on average, old retailers such as Messi and Kohl's can only adjust it about 2 times.

Although the old American retail industry has won the opportunity to compete fairly with e-commerce under the support of Pan channel reform, competitors such as Amazon have not stood still. The super front-end and growth dynamic Internet layout has suppressed the old traditional retailers. Once it is proved that they lack the ability of self innovation, the outcome of defeat can not be avoided

With the dual support of traffic and technology, Amazon's clothing and footwear sales exceeded $41 billion in 2020, 20% - 25% higher than Wal Mart. Wells Fargo expects Amazon's clothing and footwear sales in the United States to reach $45 billion by 2021

03

Mutual achievement

Good business models are always a process of mutual achievement.

On the road to becoming the king of Amazon clothing, typical third-party businesses such as Zibuyu and Saiwei have made great contributions. In 2020, the sales of Amazon's third-party clothing sellers accounted for 72% of Amazon's clothing category sales, and the third-party merchants also benefited a lot.

Relying on Amazon's traffic and order conversion advantages, third-party merchants can often lock sales faster. FBA's mature overseas warehousing + local distribution allows consumers to receive goods in a shorter time and improve their satisfaction. Although there were different opinions in the market after Amazon deleted the number, more standardized process and service control will help third-party platforms better connect with global standards, which is actually a process of building comprehensive barriers.

After all, Amazon is a global platform. It is not unthinkable for ambitious third-party businesses to expand globally with the U.S. site as a springboard. Euromonitor data show that in emerging developing countries such as Saudi Arabia, the United Arab Emirates and India, the CAGR of clothing e-commerce market has remained at 30-60% in recent ten years. With the increasing maturity of regional e-commerce infrastructure, it can be regarded as a new mining point.

Domestically, domestic brands going to sea is an important direction under the dual cycle development pattern. In addition to the policy support in the field of cross-border e-commerce, the development outline of the 14th five year plan for the textile industry also puts forward the long-term goal of forming well-known brands with leadership, creativity and contribution to the development of global fashion. Chinese clothing brands choosing to go to sea will have great prospects.