Amazon pushes further into own brand territory
Ecommerce giant Amazon became successful by selling other people’s goods on its online platform, starting with books in the 90s, and moving through to a huge range of items today, that includes electronics, clothing, toys, and more. Earlier this year, news broke that the company had been experimenting with a more direct way to harvest revenue from the Ecommerce trend: placing its own private label goods on its platform without (in some cases) disclosing the fact that it owned them.
There is nothing immoral about this – companies routinely own numerous brands without feeling the need to scream it from the rooftops – and it makes good business sense: would your teenage daughter really want to wear an Amazon-branded pair of high heels?
Amazon’s share price has appreciated by 50% year to date
SOURCE: Yahoo Finance
Amazon has now debuted a second wave of own-brands focused on sportswear and home furnishing. According to online tech publication Techcrunch.com, the company is taking aim at athleisure brands across multiple price points. Sarah Perez reports for the magazine:
“With Goodsport, Amazon is taking on Champion and other budget activewear brands with performance apparel for men and women. Peak Velocity is a premium men’s activewear brand that would better challenge Nike or Under Armour, explains L2. And Rebel Canyon is a men’s and women’s athleisure line that could take on Lululemon.”
At the same time, Amazon has launched two home furnishing brands, as it looks to push into one of the rare areas in which it hasn’t yet cornered the market: “mid-century modern-focused” brand Rivet, and the more modern (and higher priced) Stone & Beam.
Investors should welcome this development: Amazon’s own-brands are a booming business. A recent report from One Click Retail says that some of these brands have grown as much as 90% year on year, and the biggest of them now has over $250 million in annual sales.
Dominion holds Amazon in its Global Trends Ecommerce Fund.
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