For a long time, "acclimatization" has been a major label for the development of overseas e-commerce in China.
At present, overseas luxury e-commerce platforms such as NET-A-PORTER and FARFETCH are making continuous efforts in localization.
On May 6, NET-A-PORTER teamed up with Tmall to launch the Metaverse project, and previously announced the Chinese nickname "Pote" and invited Liu Wen to be the brand spokesperson in China.
However, in the eyes of industry insiders, the current luxury e-commerce platform has not essentially solved the luxury shopping problem.
NET-A-PORTER: Settled in the Metaverse, named "Pote"
On May 6, the luxury e-commerce platform NET-A-PORTER announced that it has officially entered the "Metaverse", and jointly launched the "Pote Galaxy Digital Collection Co-creation" project with Tmall Digital Collection.
As another part of localization, NET-A-PORTER also announced on May 4 that supermodel Liu Wen will serve as its brand spokesperson in China, and released the platform's Chinese nickname "Pote".
In 2018, the luxury goods giant Richemont Group announced the establishment of a joint venture with Alibaba. Alibaba will provide key support such as technology, logistics and payment, introduce NET-A-PORTER and Mr Porter into China, and jointly develop China's luxury e-commerce market. .
Prior to this, China's luxury e-commerce has just experienced a "big wave to wash the sand" type of change.
From 2008 to 2011, a number of luxury e-commerce platforms such as Secoo and Fifth Avenue emerged in China.
However, due to the heavy offline consumption of luxury goods at that time, the difficulty of distinguishing between true and false platform sources, and cash flow, luxury e-commerce has ushered in a major reshuffle between 2014 and 2016, and only a few platforms such as Secoo are still available. persist in.
In this context, the cooperation between Alibaba and Richemont Group has also attracted widespread attention for the tough "hard bone" of luxury e-commerce.
According to the data, NET-A-PORTER was established in 2000 and merged with another luxury e-commerce company, Yoox, in 2015.
In the end, the combined company YNAP was acquired by Richemont Group at a price of 2.77 billion euros in January 2018, and the privatization was officially delisted in June of the same year.
Four months after the delisting of YNAP, Richemont Group announced its cooperation with Alibaba.
According to YNAP's last annual report before its delisting, the net annual revenue of the Asia-Pacific region in 2017 reached 356 million euros, a year-on-year increase of 22.2% at constant exchange rates, leading the world in growth rate.
For Alibaba, the direct cooperation with Richemont Group has enabled it to further gain a firm foothold in the luxury e-commerce field. While ensuring the brand variety and supply of goods, it has also solved the problem of product trust to a certain extent.
In September 2019, NET-A-PORTER officially entered Tmall and opened its official flagship store, becoming the only multi-brand flagship store of Tmall luxury products at that time.
Yoox's Chinese official website was also closed in November of the same year, and it was reported that the move was to focus on the development of NET-A-PORTER and Mr Porter.
Are localization strategies effective?
For a long time, "unacceptable" has been a major label for the development of overseas e-commerce in China. Especially on the basis of the established domestic e-commerce market structure, it is more challenging for overseas luxury e-commerce, as a latecomer, to "get ahead".
In this context, cooperation with domestic top e-commerce companies has become the best choice for overseas luxury e-commerce platforms to try localization.
Similar to NET-A-PORTER, FARFETCH, another overseas luxury e-commerce platform, also chose to join forces with domestic e-commerce platforms.
In June 2017, Fafaqi and JD.com reached a strategic cooperation and received an investment of US$397 million from JD.com, and received support from JD.com in payment and logistics. Later, it merged with JD.com's luxury e-commerce platform Toplife in 2019.
In November 2020, Fafaqi obtained investment from Alibaba and Richemont Group and established a joint venture company.
At the end of 2020, Fafaqi closed its flagship store on JD.com, and then logged on to Tmall.
In addition, Septwolves and Tencent have also successively invested in Fafaqi.
"Foreign e-commerce platforms are not suitable for China, the biggest problem is that these platforms cannot solve the problem of customers, especially in the core consumer field of luxury goods." Zhou Ting, president of Yaoke Research Institute, said, "With JD.com, Tianma In fact, the cooperation with cats is also 'seeking skin with tigers'. It is very difficult for domestic e-commerce companies to negotiate cooperation with brands. It requires a lot of cost and energy, and the brand side may not agree. After the two sides cooperate, one needs traffic and the other needs brand. The cooperative relationship has become a so-called connection between the upstream and the downstream. But the most important thing is that the online link of luxury sales cannot be solved simply with the e-commerce model.”
After cooperating with domestic e-commerce companies and receiving support in payment, logistics and online traffic, overseas luxury e-commerce companies are also making more localization attempts.
In October 2019, less than a month after launching on Tmall, NET-A-PORTER announced its participation in Double 11 and launched exclusive first products; in January 2020, NET-A-PORTER went online with 11 Chinese designers. Cooperative products.
Some analysts pointed out that the risk of reducing the sense of mystery caused by brand overexposure is one of the main reasons why luxury brands are cautious about live broadcasts and short videos, but in March 2020, the NET-A-PORTER flagship store began to test the water live broadcast, And the live broadcast room is operated at the frequency of once a week. The first three broadcasts are close to 100,000, and the number of interactions is nearly 1 million.
In addition, NET-A-PORTER has established its own logistics warehousing center in China to improve logistics efficiency.
In October 2021, NET-A-PORTER will launch the Chinese version of the App.
Recently, NET-A-PORTER also released the Chinese nickname "Pote" and officially announced its spokesperson Liu Wen.
Fafaqi acquired CuriosityChina, a Chinese marketing company, in 2018. Later, it entered the WeChat applet, launched the Chinese version of the app, and tried offline activities such as pop-up stores to "break the circle".
Johann Rupert, chairman of Richemont Group, said that online, mobile and remote shopping has proven to be a key driver of performance growth.
However, it remains to be seen whether this driving force can reverse the performance of luxury e-commerce platforms.
In 2021, Richemont Group's online distribution sector including NET-A-PORTER achieved sales of 2.197 billion euros, down 9% year-on-year; operating loss was 223 million euros, compared with a loss of 241 million euros in the same period last year.
While NET-A-PORTER dragged down the group's overall performance, the online retail sales of Richemont's luxury brands showed a triple-digit percentage growth.
According to foreign media reports, due to YNAP’s continued losses and other reasons, Richemont Group is considering selling YNAP’s equity.
Compared with the lighter NET-A-PORTER model, Fafaqi will achieve revenue of US$2.257 billion in 2021 and adjusted EBITDA of US$1.638 million, a year-on-year turnaround.
In the eyes of industry insiders, the current luxury e-commerce platforms at home and abroad have not fundamentally solved the problem of luxury shopping.
"Luxury e-commerce is more about consumers shopping online based on trust, so brands can directly provide customers with products, logistics, services, etc., in order to make luxury consumers more trustworthy. This is similar to JD.com and Tmall. The model is completely different. Luxury consumption is not an e-commerce model, but a holistic, digital service model that connects online and offline. The key point is here." Zhou Ting said, "Now I see, Whether it is a domestic or foreign luxury e-commerce platform, basically there is no such operation mechanism, so there is no way to truly and effectively solve the luxury shopping problem.”
Beijing News Shell Finance reporter Zheng Yijia