Good Opportunity For Second-Tier Brands?
VIPstore is China’s answer to Gilt and other flash sale sites
As global luxury brands continue to turn to the booming Chinese market, domestic e-commerce players are increasingly hoping to launch more high-end brand portfolios to cater to more sophisticated wealthy Chinese consumers. As one of China’s largest e-commerce platforms, VIPStore has recently been working to establish eight to ten partnerships with global luxury goods per month in an effort to enrich its brand portfolio while expanding its product mix, the Chinese-language news portal Sina reports this week.
According to China’s “2010-2011 Global e-commerce report,” domestic luxury e-commerce sales are expected to exceed 20 billion yuan (US$ 3.13 billion) by 2013. Based on statistical data released by EnfoDesk, online transactions for luxury goods in China reached 3.45 billion yuan (US$531 million) in the second quarter of this year, with the full-year amount expected to reach 16 billion yuan (US$ 2.5 billion).
The rapid growth of China’s e-luxury market has attracted a flood of global luxury brands to leverage e-commerce platforms in an attempt to meet online shoppers’ evolving and localized needs. As Jing Daily has previously pointed out, in recent months brands like BCBGMAXAZRIA have jumped on the e-commerce bandwagon on China, inking an exclusive deal with VIPStore in the case of BCBG and, in the case of Bally, signing an exclusive China partnership with the Italian e-commerce powerhouse Yoox.
Although the e-commerce market in China is arguably becoming saturated, VIPStore added a number of international brands to its portfolio in August, including Romeo & Juliet Couture, Pietro Alessandro, EcoSkin, GNC and Eliza & Ethan.
With China’s luxury industry expecting to become the world’s largest by 2015, more second- and third-tier overseas luxury brands are expected to flock to the country’s lucrative luxury market. A brand that’s new and lesser-known to Chinese consumers may still encounter push-back, due to low name recognition, but with platforms like VIPStore adding more of these second-tier brands to its portfolio — which currently counts Burberry and Chanel among its stable of brands — e-commerce could be a relatively easy way to get their foot in the door.