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Connexions – A Closer Look on “E-Retail: Luxury Gets Going… Finally!” by Patrice Nordey

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According to a study done by KPMG, 72% of Chinese tourists traveling abroad claim to have bought luxury goods. These purchases represent a significant proportion of their total expenditure (over 40%) with the most popular products of choice as cosmetics, watches and handbags. The prices of these products bought abroad are 20 to 30% cheaper than in China, and account for half of China’s luxury market today.

However, with the rapid development of online shopping in the Middle Kingdom (159 billion Euros at end 2012), we see pure Internet players taking advantage of this lucrative market in the recent years. Startups such as 5lux.com, Ihaveu.com, Shangpin or Xiu.com (87 million turnover in 2012) buy directly from distributors – rarely trademarks – and short all intermediaries to offer prices 20-50% lower than those charged by official channels shops.

Some of these actors, such as Secoo.com, even sell second hand luxury goods while ensuring the authenticity and condition of the product through strict certifications.

To counter these new discount models – which have tremendously opened consumers’ appetite for the “digital luxury” – premium and high end brands fuss to offer their online distribution model to recreate the conditions of an experience luxury with exclusivity, personalization and value-added services.

Upscale cosmetics brands were the first to launch, for example Lancome or the specialized retailer Sephora in 2006. Marni, Armani, Bally, Dolce & Gabbana, Alexander Wang and the Moncler brands have also launched in 2012 under the auspices of the Italian Yoox platform. More recently, Hugo Boss and Coach launched their e-commerce with a narrow range of products. Department stores such as Marks & Spencers and Lane Crawford also accelerated the development of their Internet offerings for their wealthy clients in China and Hong Kong.

Estimated at 11.1 billion RMB in 2011, the e-luxury market in China jumped by 71% in 2012 with 18.9 billion RMB of online spending. It is expected to exceed 45 billion RMB by 2015 according to iResearch and thus, capturing 10% of the first luxury market in the world.

Event Watch – China in Context by Jing Daily in New York on November 14th 2013

Context in China Jing Daily

You are in US and you want to know more about Luxury, Chinese Market & Digital Strategy?

China Luxury Advisors and Jing Daily have partnered to host a seminar to provide senior leadership from luxury brands, retailers, digital companies, media organizations, hospitality, and destinations with strategic insights into the Chinese consumer that will influence both China strategy and global practices and decisions for brands who are serious about winning the Chinese consumer.

Topics will include:

  • Innovation and the Chinese consumer: As China’s luxury market rapidly changes, learn how brands are innovating to appeal to Chinese consumers, from brand positioning to design, product development, retail, and marketing.
  • Consumer influencers: From cultural traditions to KOLs, explore the landscape of what’s influencing the tastes and purchase habits of China’s affluent consumers, and learn how to best maximize investment and outreach in this area.
  • Effective brand building for the Chinese consumer: Best practices for enhancing consumer demand both in China and abroad.
  • Understanding China’s travelers: On-the-ground observations and stories from traveling with Chinese high-net-worth consumers.

Save the date & Buy your tickets here!

Context in China Jing Daily

Date: November 14th, 2013
Location: AW Asia – 545 W 25th St – New York, NY 10001
Duration: 1 day (8:30 am – 12:00 pm)
Price: seminar ticket $350 – conference special, 3 tickets $700