Private label is starting to defeat bigger brands

2018 is going to see a massive upswing in factory direct eCommerce brands from Asia into the US. Factories are hiring and investing top tier US-based eCommerce talent and agencies and building their own direct-to-consumer (D2C) brands, armed with the knowledge of what is hot and what is selling – essentially the Amazon Private Label equivalent of the non-marketplace D2C. This will likely hurt all US-owned companies who are not vertically integrated as they will not be able to compete on supply chain efficiency and price unless the cost of manufacturing is somehow impacted on one side in a big way which as of now is unlikely! As a country and as an economy, the US needs to refocus on growing its collective brand and start investing in building the world’s most advanced and sophisticated export framework and ecosystem and they need to teach their teams and leaders about competing in a global marketplace.

At this point, not too many Asian brands have enough brand equity to go D2C in the US. There aren’t very many examples outside of electronics and cars. But it is changing because of online reviews and forums.

There’s a smattering of Chinese companies that have been doing an incredible job of D2C. It’s not as hard as most people think, and they have price on their side. When you make millions/year off of Amazon, and you’re hungry, it goes to the next logical step.

In addition, the purchasing power of the average consumer in this part of the world has risen rapidly in recent times, and that has significantly increased the size of the opportunity compared to even as little as 2-3 years ago.

They’re watching the west import, mark up and prosper. It’s only a matter of time and they’ll be making big moves to get in on the game. Once they figure out how to line up their branding and marketing with the western consumer, it’s going to explode.

These companies are now advertising on TV and telling people to search and buy on Amazon. This trend will only accelerate in 2018 and the trade deficit will only continue to grow as we push further to bring in good from Asia.

This is already happening on a large scale on Amazon. In fact, Amazon spent a great deal of resources this past year running symposiums in China to promote this opportunity. They will likely start running their own ocean freight fairly soon.

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