Online Apparel - A Trend Growing Faster Than You Think
Would you buy clothes online?
When online shopping first started in the 1990s, certain categories of items were thought to be very difficult to sell online. Clothing was one of them.
How do I know it fits? What will it look like when I wear it? If I don’t like it, how do I return it?
These valid concerns meant online sales of clothing significantly lagged items such as books, music, electronics and software in the earlier days of online shopping. This is now changing rapidly.
Here are 3 powerful statistics showing how the online clothing industry is set to grow much faster than most people think due to advancing technology, increasing comfort with online shopping and better delivery logistics. It is an industry we strongly believe is worthy of investment consideration.
20% The estimated average annual sales growth (by Goldman Sachs) in the US online apparel and accessories market over the next 4 years. This will add US$50 billion of sales to online clothing companies over that period. At an average purchase price of say US$50 to $100 per item, it could equal 500 million to 1 billion items of clothing being sold online. Any industry selling in that sort of volume with strong growth deserves the attention of long term investors.
25% In the same report by Goldman Sachs, it was estimated 25% of all clothing and accessories sold in the US will be purchased online by 2020. In fact, 35% of people surveyed between the ages of 25 – 34 already spend more than half of their clothing spend online. People between the ages of 35 – 44 are not that far behind at just under 30% who spend a majority of their clothing spend online. As this demographic continues to age and increase in wealth, the momentum towards increasing online clothing spend looks very likely to continue for at least the next decade.
339% The amount by which this large online retailer’s share price has appreciated over the last 5 years. Yes, it’s share price has increased by over 4 times. This company is now one of the largest sellers of clothing anywhere in the world with estimates it sells over US$16 billion of apparel online per year. At the time of writing, AtlasTrend’s managed funds are invested in this company. Despite its strong share price performance in the past 5 years, we believe there is still plenty of room for the share price to increase over the next 5 years.
Which company are we referring to? To find out plus the identities of 2 additional fast growing online clothing retailers the AtlasTrend Online Shopping Spree Fund has invested in, sign up here up for free. As a member, simply click on Investing Ideas & Info, then “Trending Insights” when you’re logged in to access the full article.
Kent Kwan is a co-founder of AtlasTrend, a global equities fund manager that makes it easy for anyone to invest in the world's most thriving trends.
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