Is this category on Amazon in crisis? How can sellers cope with the involution of the red ocean?

Last year, when the epidemic was raging, overseas consumers could only shop for products online, and Amazon's overall sales rose accordingly. Therefore, Amazon's clothing sales increased significantly in the third and fourth quarters of last year. Although the overall demand for clothing decreased, the shift of offline demand to online still allowed Amazon to reap a large wave of dividends.

However, in the past two quarters, overseas markets have abandoned blockades and vigorously promoted vaccination. This has brought a large amount of fashion apparel shopping demand back to the offline market. For example, Nordstrom reported a 101% year-on-year increase in the second quarter, and Skechers said its second-quarter sales increased by 127% compared with 2020 and 32% compared with 2019.

At the same time, the online sales share of Amazon and Walmart's apparel categories is continuing to decline. Although the decline has slowed down after Q2, the overall share has almost fallen back to the level before the epidemic. Sellers in the apparel category should be able to clearly feel the sluggish traffic. The more the traffic is not growing, the more involution occurs within the seller circle. Many sellers have to use their best skills to compete desperately in order to share a smaller and smaller pie.

Especially at this moment, when Amazon sellers are preparing for the year-end peak season and need to rush to schedule LD, the impact of internal competition is too serious. . .

The biggest impact of involution is that in order to maintain order growth (or even just to keep the order volume from decreasing), facing the increasingly fierce price war within the category, you have to lower the price to achieve your goal. This phenomenon is particularly fierce in the red ocean category. Clothing fashion is the leader in the involution category.

Last year, when Amazon was still able to expand its pie, many sellers took advantage of the growth of the clothing category to enter the market. This year, the market is smaller and the pie is not big, so a large number of sellers can only scramble for the remaining limited market, and internal competition is almost an inevitable result. In addition to avoiding these red ocean categories when selecting products, we also need to know how to minimize the impact of internal competition when we have to compete.

If you want to avoid internal competition, changing the track should always be the first thing you think of. Most small and medium-sized sellers should avoid the red ocean when selecting products, choose vertical subcategories, don’t think too long-term, and start from a small and beautiful market. If you are a seller who is deeply bound to clothing and fashion, my suggestion is to consider changing platforms. Here we can see that Walmart in the data actually needs clothing sellers.

Although the market share is also declining, Amazon's size in the clothing category is still higher than Walmart. The two sides have always maintained a market gap of about one time, which is also a big piece of cake that Walmart wants to make up for. Walmart is also looking for partners in this regard to increase clothing products and help it increase clothing supply and market share. First, in the first half of the year, a large number of well-known designers were signed as creative directors of their own brands, and more first-line design styles were provided by suppliers. At the same time, their product lines were expanded through cooperation and acquisition of some clothing brands. These official efforts are narrowing the gap with Amazon, but it is difficult to catch up in a short period of time. Walmart's demand for clothing products will continue to expand. Therefore, sellers who are deeply bound to the clothing category may wish to look at the next track. Multi-platform layout is the best way out. Red ocean categories like clothing are mostly monopolized by a few heads on Amazon, and it is difficult for small sellers to get in.

However, the monopoly category does not necessarily have to be a large category. If small and medium-sized sellers can monopolize some vertical small categories at a lower cost, the number of orders they get cannot be ignored!