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Luxury brands at China turn to digital commerce

May 29, 2019

China is famous for high population with a big purchasing power. In recent years, Chinese shoppers intent to buy luxury goods online, resulting in new strategies of global luxury companies in Chinese market. There are so many big brands collaborating with internet companies to provide consumers with online-shopping services. 

The real consumption in China

In 2018, Chinese consumption accounted for one-third of global luxury  spending. It is estimated in a report by the consultancy McKinsey & Co, that by 2025 the number will be doubled to around 1.2 trillion yuan (US $175 billion). Chinese shoppers are changing their habits to buy high-end products online, which means the online luxury retail market in China is developing prosperously. This is a challenge for luxury brands that have constructed swanky shops with personal service in China. Therefore, these companies should go online in order to get Chinese shoppers’ attention.

The trend for online shopping is viral in China

New digital strategies of luxury brands

The luxury e-commerce trends in China has led to e-commerce luxury retails. In February, there was an announcement of collaboration between the Chinese online retailer JD.com and London-based luxury retailer Farfetch. This partnership will bring Chinese customers an opportunity to get access to more than 1000 high-end labels from UK. CEO of Farfetch reported that the retail firm was expecting to debut by the end of next month.

Luxury e-commerce trend is also up across the board at Ralph Lauren. However, CEO of the company Patrice Louvet said that he need to carefully select the places that made sense for his label to live on in China. It is because Chinese customers often purchase small items like accessories online rather than mink coats.

Famous luxury brands such as Saint Laurent, Louis Vuitton, Burberry and Alexander McQueen have operated their sites to expand their digital retail footprints in China. In the meanwhile, Tom Ford has worked with Alibaba’s Tmall. Some other companies use WeChat – an ubiquitous app in China to get access to customers at this market.

It is understandable that online luxury retail is a leverage for digital opportunities. Thus, high-end companies who want to develop well in China shoukd include e-commerce retail in their stratrgies to be more competitive in this market.

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