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Amazon Boosts Private Label Initiatives With Own Brand Toys

AmazonAMZN has reportedly unveiled its private label toys for toddlers and young children under its home brand, AmazonBasics.

Notably, this move of Amazon is a significant step toward expanding its footprint in the toy market. The company already has a robust collection of toys from different sellers on its online retail platform.

Consequently, the latest move along with its existing toy portfolio will aid the company in rapidly penetrating the global toy market. It is to be noted, per a Research and Markets report, global toy market revenues are expected to exceed $120 billion by 2023 at a CAGR of 4% between 2017 and 2023.

Strengthening Toy Strategies

The company's product pages have started advertising few AmazonBasics branded toys like Soft Play Single Tunnel, Soft Play Climber, Soft Play Climb, Crawl Play Set and Kids' Toy Storage Organizer.

The toys are not yet available for purchase but are expected to be ready for sale soon.

We believe Amazon's intentions of foraying into the toy retail market with its private label can cause massive disruption in this particular space due to its aggressive retail strategies and vast e-commerce platform.

However, this initiative does not bode well for toy makers like Mattel MAT and Hasbro to name a few. In fact, shares of Mattel plunged almost 4% on Dec 10, following the news.

Further, Amazon's latest move is in sync with its holiday strategy which considers toys as key growth driver during the holiday season. In the mid-half of this year, the company revealed its plans of publishing toy catalogs for this holiday season and implemented it in the beginning of November.

Recently, the company revealed that it received more than 18 million toy orders worldwide on Black Friday and Cyber Monday.

Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

Booming Private Label Business

Amazon's sustained efforts on expansion of its private label business are evident from its latest move.

Apart from toys, the e-commerce giant recently rolled out its first ever AmazonBasics foam mattress which falls under the category of bed-in-box mattress.

Further, the company launched Amazon Accelerator Program by which it intends to bring various companies and manufacturers under its program and make them part of its "Our Brands".

Notably, Amazon has created job openings to run its private label business efficiently. Moreover, it has created job opportunities for several manufactures to produce products which will fit into its huge Private Brands product family.

Currently, its private label product portfolio comprises of more than 120 products across kitchen goods, batteries, clothing and electronics accessories categories. Notably, the number has surged by more than nine-fold since 2016.

We believe an expanding product portfolio on the back of home brands will aid Amazon to transform its private label business into a profit generating one.

Further, this will aid the company in fortifying its competitive position against the likes of Walmart WMT , The Kroger and Target TGT which are also leaving no stone unturned to boost their presence in private brands business.

Notably, Walmart has a huge portfolio of own brand products. Further, Target is making advances to expand its home brand portfolio with new product introductions.

Nevertheless, Amazon's growing initiatives for its private label business along with its various customer friendly offers and loyalty programs will continue to boost retail position.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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