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2010-12-16
Amazon, eBay and Google battle for growth in the global online apparel market

Online apparel sales are set to be boosted significantly by the entry of two giants in Internet retailing and a search engine company, according to a report in the latest issue of Global Apparel Markets from the business information company Textiles Intelligence.

Amazon and eBay have recently relaunched their apparel and clothing businesses, and are intent on aggressively building up their shares of the online apparel market. However, neither has banked on the entry of their new rival Google.

Online sales already account for a significant share of the market for clothing, shoes and accessories. Indeed, in the USA alone they accounted for almost 16% of the total market for these items in 2009. Moreover, sales grew by a remarkable 17% in that year alone, and between 2009 and 2014 sales are expected to increase by no less than 58%, according to one leading consultant. Similar growth is expected in other advanced economies, such as Australia, Hong Kong and the UK.

In fact, sales of clothing via the Internet are expected to grow faster than sales of other categories via the Internet -- including electronics -- over the next five years.

For many firms, selling apparel online is a comparatively high risk business. But Amazon and eBay already have strong market shares, brand positions and reputations in online retailing worldwide. It seems likely, therefore, that their respective ventures in the apparel sector will prove highly successful.

Recent initiatives by Amazon include the launches of its Outdoor Recreation Store and its Denim Store, its acquisitions of Zappos.com and BuyVIP.com, a refocus on high-end fashion retailing, and the launches of exclusive collections such as Heidi Klum for New Balance.

eBay relaunched its clothing sales in April 2010 under the eBay fashion brand, complete with videos and comments from fashion stylists and a "find similar items" image-matching feature. One recent initiative has been to set up "storefronts" in the USA in which retailers such as Brooks Brothers and Timberland sell excess and discounted stock directly to buyers. In addition, eBay has launched a fashion outlet site in the UK, and the company’s eBay Fashion LookBook has been billed as the first ever "shoppable, shareable digital style gallery". In October 2010 eBay announced that the designer Derek Lam would introduce an original collection to be sold exclusively on the site.

Google is a newcomer to apparel retailing, having traditionally earned 97% of its revenues through advertising. But it is a huge spender on research and development and its market entry could change the rules of the game for everyone.

Google has formed a website called Boutiques.com which enables consumers to run their own "personalised boutiques" with the help of recommendations and advice from celebrities. As such it represents a significant new direction for the company and for the online apparel market in general.

The site is aimed primarily at teenage girls -- and especially those most enamoured with celebrities. At first glance, it appears to be more like a fashion magazine than an online store. However, Google claims that, through search engine fine-tuning, it has gone further than anyone else in personalising the online shopping experience and in making the choices available less overwhelming.

Looking ahead acquisitions are expected in 2011. Younger and less stable online apparel sites will become increasingly vulnerable and stand to benefit from the platforms which giants such as Amazon, eBay and Google can provide.

"Amazon, eBay and Google battle for growth in the global apparel market" was published by the global business information company Textiles Intelligence in issue No 11 of Global Apparel Markets.

Other reports published in the same issue include: "Talking strategy: challenges for US importers and exporters to overcome"; "Trade and trade policy: the EU clothing import market and its ten largest suppliers"; "Product developments and innovations"; and "Business update".

Global Apparel Markets is a quarterly publication from Textiles Intelligence. Each issue provides an independent and worldwide perspective on the global apparel industry.

Issue 11 of Global Apparel Markets costs £225 / Euro392 (Europe, Middle East or Africa) or US$493 (Americas or Asia Pacific) in printed format. An electronic supplement is also available. For more information, please contact Belinda Carp at Textiles Intelligence, Alderley House, Wilmslow, SK9 1AT, UK.

Tel: +44 (0)1625 536136; Fax: +44 (0)1625 536137; Email: info@textilesintelligence.com

For press copies and editorial enquiries, please contact Robin Anson at Textiles Intelligence. Tel: +44 (0)1625 536136. Fax: +44 (0)1625 536137. Email: editorial@textilesintelligence.com.

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