American e-commerce giant Amazon.com Inc. is looking to foray into private-label sportswear, and has started tapping some of the biggest athletic-apparel suppliers, reported Livemint.
Taiwan-based sportswear producer Makalot Industrial, which produces clothing for Gap Inc., Uniqlo and Kohl’s Corp., is making apparel for the Amazon line. However, no long-term contracts have been signed yet, sources told the paper.
Silvia Chiu, analyst at SinoPac Securities Corp. pointed out Eclat Textile Co., another Taiwanese supplier that makes clothing for Nike Inc., Lululemon Athletica Inc. and Under Armour Inc. is also contributing to the effort. The manufacturer is known for making high-performance sportswear.
Under the trial project, these manufacturers are producing small numbers of products for Amazon.
It is not the first time that Amazon is venturing into private-label fashion. It has offered office clothing, jackets and dresses under names like Goodthreads and Paris Sunday.
However, it's stepping into sports apparels is expected to up the competition for some of the world’s biggest athletic brands, as also lead to upheaval of the industry.
The Seattle-based company did not respond to a request for comment.
Activewear companies like Nike and Lululemon are already facing steep competition in the market. In September, Nike said it expects sales to decline again this quarter in North America. While Lululemon is looking for growth in the overseas market following competition in the market for yoga pants and other sporty apparel.
Chiu explained Amazon's venture in private-label apparels is to fill gaps in its inventory so that it can offer more options to customers who find a limited collection from established brands.
Apart from providing more options to their customers, the move invites brands reluctant to sell their full inventory on Amazon, said the report.
Chui added the suppliers' alliance with e-commerce platforms reflect the shifting demand from consumers.
“Online apparel sales accounted for 19 percent of all apparel sales in 2016, up from 11 percent in 2011,” Chiu said. “Online sales are primed for strong growth.”
Major sportswear supplier Eclat expects new clients, for which shipments began in August, to contribute as much as 12 percent of 2018 sales, according to Chui. “The contribution this year will be small, but the potential is high,” she said.