Dive Brief:
- Amazon's top five apparel "brands" sell unbranded clothes shipped to consumers from China, according to a recent study from Coresight Research, a global retail think tank. One such brand, listed on the site as WSPLYSPJY, alone makes up 8.6% of all Amazon men’s and women’s clothing listings.
- The e-commerce giant's apparel offering grew by 27.3% from February to September reaching 1.12 million items, largely driven by third-party sellers.
- The dominance of these apparel brands on the site, despite their weeks-long delivery time, suggest that Amazon itself adds credibility to unknown third-party sellers, according to the report, presenting a growing challenge for the supply chain to handle small parcels traveling longer distances.
Dive Insight:
Coresight's research reveals that though e-commerce shoppers are concerned with "fast and free" shipping, Chinese sellers are betting that they can be convinced to click the buy button for another reason: cheap.
"The rankings of most-listed products have been swamped by ultralow-price, generic clothing items that are dispatched on order from China," reads the report.
Third-party sellers represent 90% of Amazon's fashion offering and the dominance of some of these "non-brands" cannot be overstated.
"For almost 9 in 10 clothing items, Amazon.com is an intermediary, connecting seller and buyer — and for those using FBA, holding and shipping on behalf of the sellers," John Mercer, senior analyst, Coresight Research told Supply Chain Dive via email.
WSPLYSPJY had more than 96,000 items listed on the site in September — 60,000 more than the second place seller, which also ships from China.
If the vast number of unbranded products shipping directly to the consumer from China demonstrates the appetite for international e-commerce, its no wonder why third-party logistics providers (3PLs) are looking for cost-effective ways to accommodate it.
UPS, for example, applied for a patent to use blockchain technology to track packages through multiple carriers and modes of transport — often necessary for cross-border e-commerce orders.
But there's a pretty big cloud moving in over all of this global buying and selling, at least for American consumers.
Clothing is able to ship direct to American consumers from China and other countries classified as "developing" because of the rules set out by the Universal Postal Union (UPU), a 192-country organization backed by a treaty that sets shipping rates from country to country, of which the U.S. is currently a member. The UPU makes it cheaper to ship items weighing under 4.4 pounds from developing nations, which has led to the rise of vendors like the ones Coresight highlights.
In October, President Trump ordered the U.S. withdraw from UPU, a process that will take a year. As a result, the U.S. will have to negotiate new rates with individual countries. If the new rates are substantially higher than existing, it could have a major cooling effect on direct American consumer purchases of Chinese goods, and the top sellers in Amazon fashion could see a major shake-up in turn.
