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JIAXING, CHINA / NEW YORK (REUTERS) – When Mr. Kevin Chiu quit his job in 2012 to try his luck in creating an online clothing business in a rural Chinese town, his main goal was to win more time to spend with his wife and his wife. newborn child.
He did not think his Orolay sweat jacket would become a huge success, celebrated as the "amazon coat" by American social and mainstream media – and presented as a budding rival to the premium brand Canada Goose.
Using duck down from the Chinese provinces of Hebei and Anhui, polyester coatings cost between $ 80 and $ 139 (between $ 108 and $ 188). In contrast, Canada Goose jackets start at around US $ 575 in the United States.
"We made more money in January than in 2017," Chiu, 32, told Reuters at his plant in Jiaxing, east China.
He estimates that his company has realized a turnover of $ 5 million last month and hopes to bring in between $ 30 and $ 40 million this year. Sales in the United States – which are almost all sold through Amazon.com Inc. – account for 70% of total revenue.
However, the success of Orolay is not simply a story of competitive prices and a design that has been favored by American consumers.
Mr. Chiu is part of a wave of Chinese merchants who have benefited from the measures introduced by Amazon in recent years, facilitating the sale on its site for foreign sellers.
This has raised concerns among US sellers on Amazon, who fear being underestimated. And in sectors such as clothing, experts say that physical retailers can not ignore the threat posed by the influx of small brands, many of which are based in China.
"It's the collective impact of all these brands on the industry, and by adding them together, they're all gaining market share," said Robert Robert Loren, General Manager of Xcel Brands Inc. whose products is sold at Macy's Inc and on Amazon.com.
Amazon declined to comment on the view that Chinese merchants using its site would dry up US companies. It does not break down the number of sellers on its sites by country.
The number of Chinese merchants on Amazon is expected to increase further, due to fierce competition and rising costs that made sales on local e-commerce sites such as Tmall of Alibaba Group Holding Ltd, less attractive. said badysts.
Indeed, Mr. Chiu no longer sells in China. Orolay's other markets are Europe, Japan, Taiwan and Australia.
"We have already sold on Alibaba early, but the competition in China is tougher," he said, adding that the increased costs badociated with the use of local sites was also a factor .
In addition to the costs of using Chinese e-commerce sites, sellers also face other costs, such as investing in customer service teams. Alibaba refused to answer Reuters' questions about rising costs for suppliers.
According to badysts, the number of Chinese merchants selling on Amazon's US site has begun to increase over the last five years after measures were introduced to allow sellers around the world to store products in Amazon warehouses. help ship them to customers.
Last year, the retail giant also launched a program that directs Chinese-based sellers to local lenders. In comparison, Amazon offers loans to some small American, British and Japanese companies that sell on its site.
Chiu credits Amazon with much of the company's success, but plans to diversify, explaining that retailers' offerings include online sales invitations from Walmart Inc. and the American commercial site, Rue La La.
A spokesman for Walmart said the company had not yet reached an agreement with Orolay. La La Street has not responded to requests for comments.
Expansion plans include the extension of the Orolay product line to cotton clothing and men's outerwear. But for the moment, Chiu is still marveling at his company's success in a market he barely knows.
"I went to New York on vacation twice last year and I was so happy to see people on the street wearing our jackets," he said.
"I was very anxious to ask them how they liked our jackets, but I did not do it because I do not speak much English."
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