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Amazon private label gains share

News, 09 November 2016

SEATTLE, WA: Amazon's move into private label products appears to be paying off as a new analysis finds these competing with category leaders or even becoming the online category leader.

Using consumer spending data representing millions of consumers, the market insights team at analytics firm 1010data examined sales trends from September 2015 to August 2016 for three key online categories – batteries, baby wipes and speakers – and reported that Amazon had been very successful in taking market share from established brands.

For example, online battery sales were estimated to amount to $113m for the past year, with 94% of such sales coming via Amazon sites.

Among the top ten battery brands, the AmazonBasics private label product accounted for about one-third of battery sales online, 1010data said – and it was growing at 93% year on year.

"With an online conversion rate that is 1.5 times greater than the category average, consumers are more likely to buy Amazon batteries once they view them online," it stated.

The Amazon Elements product line, which includes baby wipes, is exclusive to Amazon Prime members, and, despite the limited audience, it has become one of the top brands online for baby wipes with a 16% share (based on total dollars sold among the top ten brands), putting it third behind Huggies (33%) and Pampers (26%).

1010data noted that sales of Amazon Elements baby wipes had increased 266% over the past 12 months and added that customers who viewed this product were three times more likely to purchase than the category average.

In the final category considered, Amazon claims an 89% share of the online speaker market – worth an estimated $1bn in sales in the past year – with its own Echo product the most popular and holding a 45% market share among the top ten brands.

"No matter the market, the challenge for brands in an increasing number of categories is that Amazon is the top online channel. And Amazon is leveraging its dominance to sell its own private-label brands which compete with traditional suppliers," said Jed Alpert, Senior Vice President of Marketing at 1010data.

And whether that's based on price or innovation, "the bottom line for brands is they can no longer view Amazon as solely a channel and need to acknowledge Amazon as a competitor".

Data sourced from 1010data; additional content by Warc staff