» » Chinese firm behind the 'Amazon Coat' hits jackpot in U.S., eschews China

Chinese firm behind the 'Amazon Coat' hits jackpot in U.S., eschews China

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It never occurred to him that his Orolay down jacket would be a huge hit, hailed as "Amazon Coat” in the US social and traditional media — and supported by the budding rival of the premium brand Canada Goose.

Polyester coats cost between $ 80 and $ 139 using duck down from the Chinese provinces of Hebei and Anhui. For comparison, Canada Goose jackets cost from $ 575 in the United States.
"In January, we made more money than in the whole of 2017,” said 32-year-old Chiu in an interview with Reuters at his factory in the eastern Chinese city of Jiaxing.

According to his estimates, the volume of sales of his company last month amounted to $ 5 million, and this year it counts on $ 30–40 million. Sales in the US - almost all of which are sold through Amazon.com Inc. - account for 70 percent of total revenue.

However, the success of Orolay is not just a story about competitive prices, but also a design that has gained popularity among consumers in the United States.
Chiu is one of many Chinese merchants who have taken advantage of measures introduced by Amazon in recent years that have allowed overseas merchants to easily sell on their website.

This raised concerns among American merchants on Amazon that they were deprived of weapons. And in industries such as clothing, experts say that retailers cannot ignore the threat posed by the influx of small brands, many of which are based in China.

"In general, this is the influence that is happening in the industry on the part of all these brands. When you add them, they just take market share, ”said Robert D'Loren, executive director of Xcel Brands Inc., whose products are sold at Macy's Inc. and on Amazon.com.

Amazon declined to comment on the view that American firms are undermining Chinese merchants using their website. It does not break the number of sellers on their websites by country.
Analysts point out that the number of Chinese merchants on Amazon will continue to grow, as fierce competition and rising prices have made it less attractive for sale on local e-commerce sites such as Tmall Alibaba Group Holding Ltd.

Indeed, Chiu is no longer sold in China. Other Orolay markets are Europe, Japan, Taiwan and Australia.

"We were selling on Alibaba in the early days ... but the competition in China is tougher,” he said, adding that the increase in costs of using local sites is also a factor.

In addition to paying for using Chinese e-commerce sites, merchants also face other costs, such as investing in customer service groups. Alibaba declined to answer Reuters questions about whether spending has increased for suppliers.
Analysts say that the number of Chinese merchants selling on the American Amazon site has increased over the past five years after the introduction of measures that allowed sellers around the world to store goods in Amazon warehouses and assisted in delivering these goods to buyers.

At the end of last year, the retail giant also launched a program that guides Chinese sellers to local lenders. For comparison, Amazon offers loans to individual small businesses in the US, UK and Japan, which sell on its website.

Chiu credits Amazon for most of the firm’s success, but intends to expand it, saying that retailer offers include invitations to online sales from Walmart Inc. and the US shopping site Rue La La.

A Walmart spokeswoman said the company has no agreement with Orolay. Rue La La does not respond to requests for comments.
Expansion plans include expanding the range of Orolay products to cotton and men's outerwear. But for now, Chiu is still surprised at how his business has become so successful in a market that he barely knows about.

"Last year I went on vacation to New York twice and was so excited to see people wearing our jackets on the street,” he said.

"I really wanted to ask them how they like our jackets, but I did not do it because I do not speak English."


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