On October 27th, Jingdong recently split the luxury goods business from the men’s luxury department and established it as a separate secondary department luxury brand department. In recent years, the luxury retail industry has experienced an overall recovery trend. Domestic E-Commerce giants are actively deploying luxury goods. JD’s layout of luxury goods is also accelerating.
According to the “Global Luxury Market Monitoring Report Spring Edition 2018” data, in 2018, the global personal luxury goods market sales revenue is expected to increase by 6% to 8% year-on-year, reaching 276 billion to 281 billion euros. The report specifically pointed out that Asia is expected to become the main market for luxury goods sales growth, the increase will reach 12%, higher than the forecast growth in October last year. Among them, the sales of personal luxury goods in the Chinese mainland market is expected to increase by 20%-22% year-on-year, far exceeding the rest of Asia.
In the overall good industrial environment, domestic E-Commerce giants are also targeting the luxury goods sector. Alibaba’s Tmall Mall has been exploring the luxury business since 2014. At the beginning, only the famous luxury brands such as Burberry opened the Tmall flagship store. By August 2017, Tmall simply opened the luxury channel Luxury. Pavillion, the luxury platform, occupies the first place on the home page of Tmall APP. After only half a year on the line, Luxury Pavilion has nearly 100,000 high-end members with a consumption of more than one million yuan.
And Alibaba’s old rival Jingdong is not to be outdone. Jingdong‘s luxury goods business started as early as 2010, but for many years, Jingdong has not found a good entry into the luxury business. In 2011, Jingdong Mall 360Top was quickly closed. However, in June 2017, Jingdong invested 397 million US dollars in Farfetch, and then founded China’s first luxury flagship independent platform Toplife, dedicated to creating an all-ecological boutique E-Commerce platform with the concept of unbounded retail. Although Toplife can use the Jingdong account to log in, but independent of Jingdong main station, it will separate its luxury sales from 3C department store.
Toplife was established two months later than the Luxury Pavilion, which is enough to see that JD’s layout in the luxury sector is closely following the pace of Tmall. As an online luxury sales channel, Tmall has a traffic advantage over Jingdong. It is also undeniable that Toplife is far less than Tmall in terms of brand entry, but Jingdong has passed the services of “Jing Zunda” and online exclusive brand shopping guide. To gain the trust of luxury brands; and to connect to Jingdong Mall in a targeted way, to obtain greater quality support for TOPLIFE, through the above measures or in the brand access will gradually improve, with the recent luxury brand ” Up and down, the number of the latest brands of TOPLIFE has reached 35.
At present, domestic luxury goods E-Commerce companies in addition to Tmall and Jingdong, there are also a strong library of temples. Unlike Jingdong and Tmall‘s pure luxury E-Commerce model, Temple Library currently combines online platforms and offline flagship stores, launching a global sales center, and offline sales are gradually increasing, currently accounting for 10% of total sales. %about.
According to the “2017 China Luxury Market Research Report” published by consulting firm Bain in January this year, the sales volume of luxury goods in Mainland China reached 142 billion yuan in 2017, a 20% increase from 2016, the largest increase since 2011. And exceeded the overseas market. Among them, E-Commerce sales accounted for 9%, compared with 6% in 2015. UBS believes that the annual growth rate of global luxury goods sales is expected to reach about 10% in the next few years, driven by China’s high-end consumption. With the arrival of new retail waves of online and offline integration, online sales of luxury goods may break out.
Chinese luxury consumers are also becoming younger and younger. According to the World Luxury Association, the average age of Chinese luxury consumers has fallen from 35 to 25, and the future of luxury consumer groups will be younger. The trend will continue further. The rise of the younger generation has prompted luxury brands to have new output windows. They are accustomed to online consumption. Foreign luxury brands are looking at this point and are trying to test the Chinese market by cooperating with major E-Commerce platforms. It remains to be seen how the future of domestic luxury E-Commerce will develop.