With growing numbers of Chinese consumers shifting their luxury spend to the local market, more and more Western brands are offering e-commerce in the world’s most advanced digital space.
In July, Louis Vuitton joined Gucci and Burberry in launching its monobrand e-commerce sites in China, where digital luxury is still dominated by local giants such as Tmall and JD.com. The sites are in local language and currency, with services that match the brands’ efforts in the West.
Mario Ortelli, senior research analyst for luxury goods at Sanford C. Bernstein, said other luxury brands would follow suit. “I think that all brands will arrive online to China sooner or later,” he predicted.
Rogerio Fujimori, analyst at RBC Capital Markets, noted Chinese consumers are taking advantage of narrowing price differentials and Chinese government initiatives to streamline customs procedures for e-commerce.
“There is a structural trend toward repatriation in general, and within China, like in any other market, there is a shift to omnichannel, a shift to mobile,” he said. “You have to be there — online, offline — with a consistent offer and service for the customer, wherever he wants to buy.”
A few LVMH Moet Hennessy Louis Vuitton beauty brands including Fresh, Guerlain and Make Up For Ever have opened flagships on Alibaba’s Tmall, and Tag Heuer launched on the platform in February.
While those European brands are able to benefit from the huge traffic to the Chinese sites, counterfeiting remains a big problem, especially on the consumer-to-consumer site Taobao. This is prompting an increasing numbers of high-end brands to turn to self-operated e-commerce.
Bally chief executive officer Frédéric de Narp told WWD that in the first full month of business, sales on the brand’s new Chinese site were 70 percent above budget.
“We launched it quietly, and it’s already been a success. We’re in charge of our own destiny and we protect the integrity of each product. Heritage brands have to protect the integrity of their quality,” he said.
In its recent “Luxury China 2017” report, the digital consultancy L2 said “luxury brands are accelerating e-commerce and social investments in China. Still wary of Tmall and JD.com, 9 percent of luxury brands have launched direct-to-consumer e-commerce in the last year.”
Among those who have yet to make the leap are Hermès, Prada, Ralph Lauren and Swatch Group.