Luxury E-Business Bubble Looms

Current China

Young people become the main force of online shopping luxuries

While China's luxury market share is expanding, luxury consumer groups are showing a younger trend, which is concentrated below the age of 45.

With the growing wealth of young people, they become the main force of online shopping luxury.

The 2011 China luxury report, jointly published by the luxury research center of the University of foreign trade and economics and the magazine "wealth quality", shows that 80% of luxury consumers have a positive attitude towards online shopping luxury goods, of which 52% of luxury consumers express "willing to try", 20% think "can trust", 7% express "high trust", and the "80 generation" consumers between 20-30 years old have the most positive attitude towards online shopping luxury.

At the same time, research shows that in all the concerns of online shopping luxury products, "product authenticity" is the most concerned issue for Chinese consumers, followed by product quality problems, after-sales service and distribution safety.

With the change of consumption concept and the improvement of consumption ability, and the Chinese people's international competitiveness.

Yu Wenlong, general manager of Fu Fan excellence China, told reporters that although the price of luxury goods is higher in China, there are plenty of people willing to buy it in China.

Especially young luxury consumers, they are not only familiar with the Internet, but also willing to accept new things, and train them to become loyal customers of online shopping luxury goods, which will be the main force of luxury e-business in the future.

Luxury websites blooming everywhere

With the development of e-commerce from the low end to the high-end, luxury e-business in China has sprung up like mushrooms. From Taobao's self-employed purchasing shop to professional e-commerce website, it can be seen everywhere.

And this trend is explosive growth. In 2011, it was also regarded as the "first year of China" for luxury e-business.

Zhou Ting, executive director of the luxury research center of the University of foreign trade and economics, told reporters that at present, China's luxury e-business can be described as "countless".

In the past two or three years, especially after the financial crisis of 2008, China's luxury e-business websites have been launched online, with better scale and efficiency, such as walking show network, Fifth Avenue, Shangpin network, excellent public network, vip.com and so on, while Jingdong mall, fan Kong, Dangdang network also announced that they will open up luxury sales channels.

According to data released by Analysys International, in the first quarter of 2011, the scale of online shopping for luxury goods in China was 2 billion 900 million yuan, reaching 3 billion 450 million yuan in the second quarter and 19% in the corresponding quarter.

The growth rate in the third quarter and the fourth quarter is expected to reach 20.3% and 32.5% respectively, and the annual turnover will exceed 16 billion yuan.

Despite the rapid growth of luxury e-business in China, there is a phenomenon that many luxury brands are very cautious in cooperating with Chinese e-commerce providers.

Li Wen, director of public relations at familiar customer network, said luxury brands worry about the impact of online price chaos, and the main worry is that luxury goods do not look like luxuries.

Many electricity providers do not manage luxury goods as luxury goods, or according to the idea of "cheap and large quantities" of low-end goods in earlier years.

The luxury brand is not the case. Luxury brand image is everything.

In Europe and America, why luxury brands are willing to cooperate with e-commerce providers? Li Wen believes that European and American electricity providers can maintain brand image and provide high-end consumers with the same shopping experience as luxury stores.

Many luxury electric providers not only help brands digest their inventory, but also do a lot of value-added services. Online sales even lead to store sales under the line.

The most important thing of luxury e-business is image, shopping experience and after-sale service.

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The luxury business bubble is looming under the favor of VC.

The rapid development of luxury B 2C business in China has attracted the attention of capital and has become a major investment hotspot in China's e-commerce industry in the past two years.

According to the monitoring and statistics of China Electronic Commerce Research Center in August, various investment funds entered the luxury B 2C market in recent years, amounting to nearly five hundred million yuan.

The typical case is that Jiapin net, which was founded at the beginning of last year, has held the angel investment fund of Taishan. After several months, it got second rounds of investment from pine capital and Jiapu capital, and then got the third round of financing of Jinsha River venture capital. This year, vip.com got a joint venture investment of Sequoia and D C M on the basis of $20 million last year, 50 million dollars.

Luxury electric providers are speeding up the "horse racing enclosure", but also like many group buying websites, rarely achieve profitability.

Huang chin, chief strategy officer of the show network, believes that China's luxury electric business is at a stage of "barbaric growth", and that young people are the future of luxury goods sales.

He said that the company still maintains an annual sales growth rate of 25%, and this year's sales volume is expected to be 1 billion yuan. Next year it is expected to further increase to 20-30 billion yuan.

Despite its impressive annual sales, the company has not yet made profits.

Huge cost investment makes the luxury electric business and many industries in the Internet still burn money, which needs to be driven by capital investment.

Zhou Ting said that the luxury market needs time to nurture and maximize the quality of services and products. However, driven by the interests of capital, venture capitalists pay attention to return, and are bound to pursue the size and quantity. This is not the trend of luxury brand development.

"The amount of luxury goods is so large, the fierce competition in the first tier brand leads to the increase in the cost of the purchase, and the price of the electricity supplier has no advantage, so it begins to develop the two or three line brand and become a fashion product rather than a luxury sale."

According to Huang Jin, at present, the network has more than 2000 brands, and plans to cover more than 5000 next year. Now it is positioned as a fashion e-commerce, not just a luxury brand.

Zhou Ting told reporters that at present, the maturity of luxury electric business is not directly proportional to capital investment, and it is very fast in terms of input capital volume and speed. It is somewhat similar to that of venture capital investing in the entire Internet industry in the late 90s.

For the less mature luxury electric providers, so much capital investment risk is great, and ultimately may damage the orderly development of China's luxury goods business market.

Li Wen believes that luxury e-business is now in an excessively hot state, and all kinds of VC are competing to enter the industry.