SHANGHAI: Luxury brands have long been wary of China’s e-commerce platforms – which are rife with fake goods – but with Chinese e-retailing now worth US$751bn annually, they can no longer afford to look away.
Since the lucrative millennial demographic embraces online platforms for almost every category – and makes up a significant number of new luxury consumers – premium brands can no longer afford to ignore the opportunity, especially as retail stores sales flag in traditionally strong markets such as Hong Kong.
According to a report in the Hong Kong-based South China Morning Post, luxury brands such as Gucci and Louis Vuitton are now embracing China’s online marketplaces, with both brands having launched online stores for Chinese shoppers this past July.
“Brands are going where the consumer is. The promise of China’s market is too big for luxury brands to ignore,” said Andria Cheng, analyst at eMarketer, in comments to the South China Morning Post.
“They also can’t ignore the fact that online, especially via mobile devices, is increasingly how China’s rising middle class is shopping for luxury goods,” she added.
Handbag and accessories brands are among the earliest adopters, even designing China-specific products to capitalize on seasonal marketing opportunities such as the Chinese New Year. Meanwhile, e-commerce companies are working to wipe out knock-offs and fake goods to give big name luxury brands piece of mind.
“China’s e-commerce giants, led by Alibaba’s Tmall and JD.com, have been aggressively courting luxury brands to their sites while pledging to fight counterfeiting,” Cheng said.
“Those efforts have also helped to ease any original discomfort and hesitation luxury brands may have.”
Data sourced from South China Morning Post; additional content by WARC