China’s third-largest e-commerce platform, VIP.com, has embarked on an aggressive campaign to bring more U.S.-based fashion, beauty and home brands to its more than 300 million annual consumers — or about 28 million a day. VIP.com’s net revenue rose 30 percent in 2017. The platform is forecasting that sales of U.S. goods will triple from $2.2 billion last year to more than $6 billion by 2020.
Hillary Wang, VIP.com’s head of global buying, who was in New York last week for meetings with brands, said, “There’s a very specific strategy. We’re looking for fashion, including sportswear, accessories and beauty brands.”
VIP.com’s parent Vipshop in February became the exclusive e-commerce partner of London Fashion Week in China as the e-tailer maneuvered for a higher profile in the fashion arena.
Wang said VIP.com already works with international labels including Dolce & Gabbana, Hugo Boss, Tory Burch, Rebecca Minkoff, Converse, Adidas and Nike. “The overall majority of our brands are international,” she said. “There are also Chinese brands and emerging designers that are doing very well domestically and internationally.
“One indicator of the appetite for U.S. brands in China is VIP’s projection of doing three times the sales,” Wang said. The site’s tightly controlled supply chain prevents counterfeiting and includes shipping and delivery in China, which is important to U.S. brands. “Counterfeiting is a huge skepticism for international brands entering China,” Wang said. “VIP.com is investing in its supply chain so that it remains air-tight. Brands are surprised at how tight it is.”
VIP.com created 11 buying subsidiaries for 11 regions — New York is one of them — with more than 100 buyers employed in the overseas offices. “It’s one of the most sophisticated infrastructures,” Wang said. “It’s the biggest team of any platform in China. We have 18 warehouses only for international merchandise.”
Chinese consumers are sophisticated, fast-paced and hungry for new brands. Asked about the slowdown in sales of luxury brands, Wang said, “Every brand has a lifespan. The [luxury brand’s] strategies aren’t keeping up with consumers in China. Consumers are upgrading constantly. The brands weren’t innovating enough. The overall trend that we see is that consumers are very innovative and constantly evolving.”
VIP.com’s consumer base is 82 percent female, with the highest level of loyalty of any e-commerce platform in China, Wang said, noting that 90 percent of the sites sales are generated by repeat shoppers. “VIP.com has the highest transaction amount of any platform,” she added. “That gives us the confidence and ability to start selling into adjacent categories.”
Wang said VIP.com can be a marketing vehicle for American brands looking to build awareness in China. “The U.S. is a very big market for us,” she said. It has strong credibility in China. We want to be the number-one channel for U.S. brands.”