Netease Discount Luxury Online Shopping: Capital Ripening Difficult Supply Source Constraints

After only one year of operation, NetEase's luxury online shopping service - NetEase Shang pin has been suspended.

In December 26, 2011, NetEase announced that its products were L.163 since January 1, 2012.

The COM domain name will stop providing the corresponding services.

January 2011, NetEase

NetEase refused to give more explanation to the closure of NetEase's Shang pin.

In the announcement, NetEase only mentioned "for sale".

A person close to NetEase Shang pin revealed: "NetEase Shang Shang's on-line was originally a hasty move.

In the past year, NetEase did not invest enough resources to operate.

Time goes back to a year ago, the passionate and business concept was "hot and hot".

Since the second half of 2010, the capital market has been booming.

According to Chinaventure statistics, luxury website investment was relatively small before 2010. In 2010, the financing scale of the luxury luxury online shopping industry appeared explosive growth. 12 cases of financing cases were disclosed throughout the year, financing 108 million dollars, far exceeding the sum of the past few years.

Only six months after entering 2011, 12 cases of financing have been disclosed and the total amount of financing has reached US $283 million.

With the "ripening of capital", luxury online shopping has begun to enter the room.

Luxury online shopping industry believes that tariff reduction will promote the rapid growth of domestic luxury consumption, and further promote the development of luxury online shopping. "Luxury online shopping is still in the initial stage of development, and has great potential in the future".

However, what can not be ignored is that after just over a year of development, the drawbacks and consumption bottlenecks of luxury online shopping are constantly being exposed.

"Barbaric growth" not only can not quickly ripening the market, but also brings a variety of worrying problems.

Capital boost

"It still takes a long way to train consumers to buy tens of thousands or even tens of thousands of Yuan products online."

With the help of a large amount of capital, luxury online shopping has made remarkable achievements in the past two years.

According to AI's survey data, the scale of luxury online shopping pactions in the mainland of China reached 6 billion 360 million yuan in 2010, and the scale of pactions in 2011 is expected to reach 10 billion 730 million yuan, achieving an annual growth of 68.8%.

Behind the rapid development, there is no need for capital to add fuel to the fire.

Take the financing of several luxury websites as an example: in January 2011, the domestic membership luxury website Jiapin net announced that it had completed the third round of tens of millions of dollars financing.

In July 27, 2011, Shang pin also announced $50 million in financing.

In August, the company announced that it had received $20 million from the company in March and was awarded $100 million by the United States Huaping investment group.

After more than a year of development, from the second half of 2011, the voice of luxury websites has gradually increased.

In the course of operation, luxury websites also encounter various difficulties from talents, channels and consumer markets.

A person who has been in the traditional department store industry for many years and now is switching to the electricity supplier field. He said that luxury is the pursuit of high added value, while selling luxury products through the Internet can only meet the needs of some white-collar workers. "Luxury online shopping is just a bubble blown up by capital".

Consumers are more interested in buying luxury related products in exclusive stores or shopping malls.

According to irey's survey, the proportion of luxury online shopping pactions accounted for the proportion of domestic luxury paction scale, which was 3.16% in 2010 and 4.37% in 2011.

E-commerce website vip.com stakeholders told reporters: Taobao has cultivated users' online consumption habits, but its average passenger price reached 100 yuan by 2009. Consumers have to train tens of thousands of products or even hundreds of thousands of Yuan products on the Internet. Indeed, there is still a long way to go.

Overseas luxury shopping websites are mainly luxury sale sites represented by Vente- Privee and American Gilt, as well as comprehensive fashion department shopping websites represented by YOOX and Saks Fifth Avenue in Italy (New York Fifth Avenue online).

The former is non open, namely, the invitation system or membership system. The latter is presented in the form of an open shopping mall, and consumers follow suit and the price is relatively close to the people.

However, such websites need great support from brands. Once they lose their support, they will lose their advantages in terms of price and product category supply.

However, the development of luxury websites in China is short, and it is difficult to work closely with foreign websites and brands.

"The consumption environment of China and Europe is also different.

Foreign markets have a higher awareness of brands, and websites can sell many niche brands.

However, Chinese consumers are more willing to buy a dozen or more brands that are more concentrated.

This is also very detrimental to the expansion of the market. "

A luxury industry practitioner said.

Bottleneck of supply

Only by working with brand agents and distributors can there be a stable source of supply.

At present, luxury shopping websites are divided into four main categories: integrated shopping websites (including C2C and B2C integrated shopping websites), independent luxury shopping websites, such as vip.com, Xiu Xiu, Jiapin and Shang pin net; luxury shopping websites, and the website launched by Yinchuan Department store.

These websites depend on the development platform and the supply of commodities.

However, in terms of supply channels and supply chain management, it is mainly through cooperation with multi-level agents, domestic and foreign e-commerce sites to obtain goods, and purchasing goods by purchasing large quantities of buyer teams overseas.

More importantly, most luxury goods manufacturers are still skeptical about luxury goods being sold online.

At present, some brands including Louis Vuitton (Louis Weedon), Herms (Hermes) and Chanel (Chanel) have attached great importance to their brand image and price control, and there are only direct stores in China.

Such brands do not act as agents or do not authorize them. Luxury shopping websites in China can only be purchased in small quantities through domestic and foreign stores.

Vip.com's stakeholders believe that the new customs policy announced in August 2011 is a heavy blow to online purchasing, while shopping websites running luxury channels are a great benefit.

However, procurement channels remain a major constraint on luxury websites.

"Through overseas buyers to choose goods, the demand for talents is very high, for funds and inventory will be a huge pressure."

Insiders believe that.

And even the luxury brands that open to the outside world are mainly open to various agents and distributors.

Domestic luxury websites can only cooperate with agents and distributors of luxury brands at home and abroad, so as to have a stable source of supply.

CEO, a domestic luxury luxury website, who did not want to be named, told reporters: "because of indirect cooperation with distributors, different products, dealers and brand owners have different judgments.

In the meantime, there have been incidents of brand intervention, refusal to supply and so on.

"Luxury licensing is a problem for all luxury websites."

"CEO brand is always willing to authorize seasonal products, but the products are not ready for the season."

In addition, China's luxury electric business has a high degree of competition, and the phenomenon of product similarity is serious.

At present, the main luxury websites in China mainly sell clothing, bags, jewellery diamonds, wrist watch accessories and other products.

Moreover, these products are concentrated in a few international top luxury brands.

35 more years

"It will take three to five years for a large-scale explosion to be restricted by channels, talents and so on."

However, online shopping for luxury goods still attracts many Internet practitioners to join.

In October 2011, Qihoo 360 launched a luxury navigation website. In November 2011, Jingdong mall also launched an independent luxury website for its luxury website operation, Jingdong mall said, "is still in the initial stage of development, it is not convenient to comment too much and issue relevant business figures."

However, a senior electricity supplier told reporters: "luxury online shopping is a market that is not easy to reclaim, and it can't be done without capital, logistics or platform advantages."

Take NetEase as an example, it has the advantages of portals, while its fashion editors have a long-term understanding and control over the luxury goods industry.

However, when people pursue the "fat" of luxury online shopping, the real competition is the management of the whole industrial chain chain.

"There are more than 300 people in the market. They focus on luxury shopping.

Relatively speaking, if other websites are only listed as part of their businesses or channels, it is very difficult to do well.

"It is not an easy thing to do luxury online shopping," said Shang Ping Wang.

Although Internet Co has the advantage of flow, how to improve the access of genuine luxury users and how to strengthen cooperation with the fashion industry chain is also a problem that can not be underestimated.

Since the second half of 2011, with the concept of electricity supplier cooling, financing difficulties and more competitors joining, the key to luxury online shopping is to do well in its products and services.

"The development of China's luxury online shopping is still at a very early stage of development."

Vip.com's stakeholders believe that, "restricted by channels, talents and so on, it will take three to five years for its massive outbreak."