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Why the 'Amazon coat' from this Chinese brand is a hit with US consumers

The 'Amazon coat,' from Chinese label Orolay, has gone viral on social media.
Orolay

A $129.99 winter coat by Chinese fashion label Orolay has become a number one best-seller on Amazon, becoming so popular it is now known as the "Amazon coat, " after going viral on social media.

The Women's Thickened Down Jacket has been reviewed more than 6,000 times on the e-commerce site and comes in five colors, with shoppers saying they are delighted to have got their hands on one.

"Just as expected. Love," wrote one in a review on Amazon, adding: "It's warm and I am pleased and happy I spotted this so, so often when in NYC and now I have mine all the way in London." Another wrote: "Finally got after seeing 20 women wearing (it) during one walk."

Some reviewers compared Orolay to outerwear from designer labels such as Canada Goose and Moncler, which typically sell coats for upwards of $900.

The Jiaxing Zichi Trade Co owns the Orolay label and is headquartered in China's eastern Zhejiang province. Orolay was founded in 2006 and started selling online in 2010, mainly targeting people in North America and Western Europe.

The company does its own design, manufacturing and distribution, which it says means it can pay workers fairly and sell garments profitably. "Our goal is to establish a fashion brand beloved by people throughout the world," it states on its website.

Its success is due in part to the influence of shoppers' peers, according to Alexis DeSalva, a senior retail and e-commerce analyst at consultancy Mintel. Fifty-six percent of women aged 18 to 34 would be willing to buy something because a friend posted about it on social media, compared to 38 percent for all age-groups, according to a survey by Mintel in the U.S. in September 2018.

"A well-reviewed item or one shared on certain social platforms can influence women's shopping decisions, prompting them to buy an item and even share their purchase with others, which can result in a domino effect," DeSalva said in an email to CNBC.

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But though the coat has been a hit, more established apparel manufacturers shouldn't panic just yet, according to Eric Fulwiler, executive director of digital agency VaynerMedia London.

"It's impossible, and bad business, to predict whether one viral hit product is a threat to an industry. Viral is not a marketing strategy and certainly not a business strategy." The fashion industry has always had viral hits, Fulwiler added. "It also shows the speed at which new trends and hit products can take off in a direct-to-consumer and e-retail landscape where the barriers to entry and distribution have been significantly lowered by the likes of Amazon."

Some shoppers will be attracted by the element of discovery, according to Michelle Whelan, chief executive of marketing agency Geometry U.K.

"Influencers, celebrities, moms and teens are all connected through the purchase of a coat. An unknown coat (not a Canada Goose expensive coat) available on the most democratic retail platform in the world, at a price that everyone can afford," she said in an email to CNBC.

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"The fact that (an) unknown brand has become a branded 'Amazon coat' is a coup. And for consumers, the feeling that we're part of something 'underground' is just cool," she added.

But Whelan warns that brands should consider working with influencers carefully. "The role of influencers have always played an important and accepted role in influencing our fashion choices. But we want transparency and authenticity. So when people are 'paid to post', it's insincere. And longer term, people will see through it.'

Some people were less satisfied with their purchase. One wrote: "I was excited to purchase this jacket after seeing it on Good Morning America. While the jacket seems very warm, the arm holes are way too tight, " and another said: "To be honest, not sure what the hype is … It is not that warm."

Good reviews or bad, Orolay seems to be doing fine. Its CEO and founder Kevin Chiu estimates the company made $5 million in sales in January, more than it did for the whole of 2017, he told Reuters earlier this month.

The 'Amazon coat,' from Chinese label Orolay, has gone viral on social media.
Orolay