Miss Ting, nous présente une analyse originale, des limites de l'ecommerce dans le secteur du luxe, en Chine.
Take a quick look at the numbers on E-commerce and Luxury market in China separately:
- In 2011, online retail generated $ 121 billion in sales, up 66% from 2010. China is poised to become the biggest online marketplace in the world within the next few years; (Barclays Capital)
- China ranked second with a 27% market share of global consumption, slightly lower than Japan’s 29%. China is expected to replace Japan as the world’s top consumer of luxury goods by 2012. (WLA, may 2012)
Sounds fabulous isn’t it? But how does it look like when the e-commerce and luxury come across together in the Mainland?
12 December 2011, in celebration of its 70th anniversary, Coach announced the opening of its first official online “Flagship” in China. It’s a one-month contract in collaboration with China’s largest B2C online marketplace Taobao Mall(coach.tmall.com).
At that time we believed the move was a smart one, however after merely two months of operation (12 Dec 11- 25 Jan 12), this online store was announced shut-down by Coach: 3,500,000 page views during the operation period while the volume of trading reminded zero till the end.
Similar case also happened to Benefit (LVMH) that quietly quitted Tmall.com earlier this month after half a year of operation.
Why didn’t it work?
For the local e-commerce companies, this failure is due to “the conflicts of license, price control and instable supply” between the online stores/marketplaces and luxury brands, but what we shouldn’t ignore is the dilemma of the marriage itself:
- Chinese luxury consumers need to experience.
For any smart Chinese consumers who grow up learning the quality-price calculation (they know what “made in china” really means: looking for the best quality among the cheap), the trustable and pleasurable experience during touching, selecting and fitting provides a feeling that justify the “unbelievable price” they are willing to pay for luxury goods. That is something online shopping cannot compare with.
- E-commerce has a long-held image of cheap and even counterfeits retailers in China.
It doesn’t change much even though high-end online stores were created. Consumers who spend a lot of time online are seeking “good deal”, so it’s not hard to understand that the same price as physical shop did not bring competitive advantages to the online shop. On the other side, the luxury discounted items sellers (Xiu.com, 5LUX, etc.) are often trapped by license, counterfeit and logistics problems.
- Logistic and after-sales service play important parts too.
Some says e-commerce can solve the distance issue, but when it comes to luxury, a consumer who lived in Kashgar (a city in extreme western China) has a different opinion: “Imagine that you spend 10 000 yuan (about 1200 euros) to buy a luxury bag, which is delivered from Shanghai all the way to Kashgar, one day a young man riding a broken motorbike comes to ring your doorbell, handing out one of his squeezed cartons from a damaged basket, I am not sure this is the experience that I supposed to pay for. ”
Furthermore, today the Riches can easily travel abroad or to the 1st tiers cities. That is part of the reason why online shopping doesn’t seem privilege enough for them.
But there is still hope.
Given the vast size of the market in addition to a growing number of competitors, luxury brands and online retailers just cannot ignore this huge piece of cake and have never stopped their steps infiltrating into the Chinese online market. Considering the specific situation in China, each of them is looking for a way out.
- International online retailers claimed to provide extraordinary services.
Yoox Group, an Italy-based fashion online retailer that runs both mono-brand websites (in China: emporioarmani.cn, marni.cn, bally.cn) and multi-brand websites (thecorner.com; yoox.com very soon in the end of 2012). “We cannot exclude opening more multi-brand stores in the future.” says the CEO Federico Marchetti.
Talking about the advantages they have compared to local online retailers, Yoox explained their expertise in this sector and claimed to provide the best experience such as home fitting service: if the consumers are not sure about the size or colors, they can call for a deliveryman to bring the chosen products to the apartments, so that they can try them on and return what doesn’t fit right away.
- Local e-commerce retailers tend to go offline.
5LUX, one of the leading luxury online retailers in China, has just opened its first “Experience Store” in Beijing in the beginning of June. With an investment of 3 million RMB, the CEO Sun Yafei defines it as “a value-added space that enhances the online store. Every week we invite our online clients to experience topical services such as consultations on hairstyle or cosmetic and advices about how to maintain leather goods.”
This “online to offline (O2O)” mode adapted by the Chinese e-commerce retailers is tending to help improve the confidence issue: justify their products and reassure their clients before making a deal.
- Luxury brands build online stores that bear their names.
Luxury brands stay positive to the online market for long-term. Amarni has “achieved the expected sales” with their official online store powered by Yoox (amarni.cn), Coach has “collected valuable data base about the potential clients” thanks to the “market test” on Tmall, they are well prepared for its official permanent “coach.cn” by the end of 2012.
A little conclusion open to be re-concluded
At least for now, most of the Chinese luxury consumers are on average much younger than their western counterparts. As a whole they are not sophisticated customers, they still need a personal shopper to guide them into the universe or provide them a prestige journey in a real boutique.
We shouldn’t forget one of the fundamental reasons why Chinese people are crazy about luxury, is that they have long been trivialized or standardized by the revolution (specially for the older generation), when all the titles, family honors are taken by the communism, luxury is the most efficient and elegant way to redefine who they are and the values they represent in their social classes in today’s China. Luxury experience is here to confirm that again and again.
The e-commerce in China nowadays goes against what has traditionally made luxury brands successful in the past. In the up coming years, luxury brands will continue their expansion in China by targeting more and more the younger and digital-sensitive generations while building a trusted and quality system of services.