Luxury Goods Facing The Electricity Supplier Panic

Based on the monitoring and research of "competitive intelligence (luxury)" in July, the billion power network is targeted at China.

The operation and business adjustment of the electricity supplier market, including branding and platform providers, will be thoroughly analyzed and discussed. The exclusive interpretation of why the luxury brand and the electronic business platform are in harmony and why they will go in the future.

Why is the luxury business day so sad?

Since it was publicly accused of selling 80% of the Hermes in China's Internet market, the Achilles heel of luxury electric business has been shot again.

For a long time, all the luxury goods suppliers in China lost their voice, which made it hard for them to say that even if the platform was loaded with genuine hermes bags, it would be hard to convince people.

The annoying thing is far from over. CEO is being taken over by the power grid, the failure of takeover network, the sharp layoffs of Jiapin network, and the closing of sina luxury products.

The luxury electric business, once pursued by investors, has yet to get rid of the common fate: the international brand has been treated with cold shoulder, the source of goods has been repeatedly questioned, the strategy has been shrinking and the scale has been adjusted, and the pformation is expected to be reborn.

What makes them even more uneasy is that after two or three years of fierce competition, no platform has won, and the whole industry is in a mess.

Industry without leader

The leader is missing.

It's not a luxury business, but it's not.

So far, billion state power network has collected a large number of public and private data of luxury electric providers.

For this batch of data, no matter online or offline, platform self built luxury channel or independent luxury B2C, no data can show who is the king.

According to the point of view of senior retail personas and Dangdang, COO Huang Ruo, only 5% to 10% of the market share of vertical e-commerce can survive.

But in terms of market size, apart from vip.com and Xiu Xiu net (with fast fashion products as the main products), all of them broke through 1 billion of annual sales, but the other luxury business operators can keep their annual sales of around 200 million. Those who are slightly worse are still in the tens of millions to 1 hundred million.

After entering the 2012, luxury electric business is basically in the name of strategic adjustment, slowing their growth rate.

It is estimated that the company that can achieve more than 500 million sales scale in 2012 is expected to change the pattern of a leaderless group.

But the premise is that we must live.

Take vip.com, one of the first platforms to locate luxury goods providers, for example, its Q1 earnings report shows a net revenue of $101 million 300 thousand, an increase of 250.7% over the same period last year of $28 million 900 thousand.

But the net loss was $8 million 600 thousand, an increase of 28% compared with a net loss of $6 million 700 thousand in the same period last year.

According to people familiar with the matter, the daily average order of the company, which once claimed revenue of 1 billion in 2011, is only about 5000, with an average daily sales of 1 million 500 thousand.

If calculated according to this data, the sales volume of this year's network is expected to be around 550 million yuan, only half of last year's growth rate. The slow pace of growth will lead to its C round of financing.

On the other hand, the luxury electric business is playing the role of buying and selling channel at the present stage. In competition, no matter product or service, it is very difficult to be differentiated, and there is hardly much ability to precipitate users.

Most luxury consumers only have a sense of belonging and loyalty to the brand, rather than the platform itself.

So that consumers have great choice in online shopping luxury, but the cost of pfer is very low.

"As long as you see a discounted discount, your hands will not be waved, you will say goodbye to the last seller."

Therefore, without a leader, it would be difficult for users to decide for the first time: where to buy luxury goods, which website should they go to? {page_break}

Optimization or pformation

In order to let consumers remember, the luxury electric business began to split up. After a round of shuffling, there are few platforms to insist on doing luxury brand sales. If we want to survive, pformation and optimization will become an important watershed.

The billion power network is divided into four categories from the aspects of platform attributes, business models and the proportion of luxury goods.

The first type is the sellers who are mainly overseas purchasing agents on the integrated platform such as Tmall and Taobao.

It is characterized by rich online luxury brands, wide market and low price.

Data show that Taobao's overseas purchasing business will grow by nearly 30% in the next few years, or about $3 billion 100 million.

However, the disadvantages of this model are also obvious, such as the authenticity of goods, the quality of service is uneven.

The second category is a luxury e-commerce channel built on Internet giants or large business platforms represented by Jingdong 360top, Sina luxury products and NetEase products.

However, due to the lack of e-commerce gene such as Sina and NetEase, its luxury business soon fell down.

The third category is the B2C, represented by excellent public network and Shang pin net, which still insists on being an independent supplier of pure luxury electric business.

The characteristics of these websites are to win the eyeballs with the international top brand luxury goods and sign more high-end high-end international fashion brands, and the unit price of the guests is basically guaranteed at around 2000 yuan.

But the biggest contribution in actual sales comes from sales promotion and discount products.

The fourth category is vip.com, Qiao Wu Qiao, Ju Shang Wang, glamour benefits, Jiapin net and so on completely pform into brand discount or limited time sale mode.

It is characterized by the gradual weakening of the concept of luxury brands, highlighting the "high-end", "fashion" and even "civilian" route.

Sales category also extended to

Jewelry, cosmetics, leather goods, home appliances, small household appliances and other fields.

The price is 3 to 60 percent off, and the user group is more extensive.

At the same time, hunger and thirst marketing can stimulate users to make rapid decisions, turnover and circulation rate is high, and can scale rapidly.

Of course, there are still some luxury electric business among these types of free.

For example, the pformation of the popular fashion brand, but to the luxury line reluctant to leave the show network, product lines ranging from dozens to tens of thousands, it is difficult to define its platform.

In addition, some focus on more segments of the electricity supplier, also has its own business model and development concept.

For example, Kelan diamonds, diamond birds, Zocai and so on focus on jewelry business, and fashion is committed to build the largest domestic list online trading platform.

Luxury brands away from the electricity supplier?

In contrast, luxury brands still have a heart knot: online shopping is likely to be a dangerous edge to stab their feathers.

According to the billion power network, although the top luxury brands have a Chinese official website, they basically serve as a platform for product display or new product launch. They have a large number of micro-blog fans, but few of them are interested in interacting with fans.

At this stage, among all the luxury brands in the world, only Armani has opened an independent official mall.

Coach, which occupies 6% of China's luxury market, is linked to Tmall mall, but the honeymoon period soon ended.

The industry is more willing to take this as a test for China's online shopping market, while other brands have hardly ever had a single ambiguity.

"The positioning of luxury brands is to lead consumption, and excessive exposure to the Internet can stifle its mystery, which is the essence of luxury brands."

Christian Blanckaert, former president of Hermes, believes that the Internet accounts for up to 10% of all the promotion of luxury brands.

The indifference of luxury brands to the Internet is also reflected in the game with e-commerce providers.

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Luxury brands have the absolute right to speak of channels, so it is difficult for e-commerce companies to get high-quality goods directly and continuously from brands.

They have to take a roundabout way, or rely on distributors to supply, or to praise the buying system.

But luxury brands always give harsh comments to such non direct or informal channels, and even pursue them in a rush.

Even Jingdong mall, Dangdang such a large platform, it is inevitable that LV, Armani, Gucci, Coach joint challenge.

This lets the electronic business platform which only obtains the dealer authorization wronged repeatedly.

One of the above luxury electronics business executives admits that even the first-line brand is willing to negotiate with the electricity supplier company with an open attitude, but the brand still set up many insurmountable rules and barriers, such as product image, packaging method, user experience, storage conditions, courier procedures, brand connotation presentation and so on.

"After a round of negotiations, you will find that you can't satisfy these harsh conditions, and you can only get away from it."

Why are they so hard to get close to each other?

The alienation of luxury brands to the electricity supplier and the pformation of the hard work of the electronic business platform make the domestic luxury online shopping more and more low.

Why can't they get close to each other?

Huang Ruo, a senior retailer, pointed out that apart from the problem of authorization and source of goods that had been repeatedly criticized, the gene and logic of domestic e-commerce were not the same as the concept and business mode of luxury brands.

First of all, the marketing idea of luxury goods is not to win by quantity, but to create scarcity of resources, so that consumers can get satisfaction.

"Similar marketing means can be seen on many high-end product lines: just like in recent years, many famous liquor brands in Bordeaux have been able to substantially reduce youth production and create a scarcity of resources to enhance premium space.

For example, the airline can give the economy class eighty percent off seventy percent off tickets, but the first class cabin would rather be empty than a big discount.

The same reason, the best selling luxury goods must not be discounted goods, but limited money.

Huang Ruo told the billion power network.

But the domestic luxury electric business has gone against the commercial logic of luxury sales: for example, to promote consumers with promotions and special sales, or to deal with high-end goods and stocks at a discount price.

Under normal circumstances, the more reasonable the brand is in the design, production, manufacture and sale, the less it should be.

Low price and tail goods have damaged the high-end image of the brand. For the luxury brands, the electricity providers are not adding and complying, but harassing.

Therefore, the Internet is unable to get the cooperation and support from the branding, so that it will go to a dead circle.

Another thing that makes luxury electric providers hard to achieve is not finding a real luxury consumer group.

Huang Ruo pointed out to the billion power network that the more mature luxury consumption groups in Europe and America are basically over 45 years old, while Asia is relatively younger, but it will not be less than 30 years old.

These people tend to have a personalized pursuit of the brand, or love the atmosphere of their creation, or prefer some kind of work and design, rather than blindly follow the big card.

"Deep users will be involved in the main categories covered by luxury brands, that is to say, there is little other than luxury goods. The middle users have a strong loyalty to the brand, showing only a series of brands, while shallow users usually have only one or two luxuries, such as Gucci glasses and LV bags."

Huang said frankly, most luxury online shoppers in China are still in the shallow stage.

It is difficult for shallow users to buy two purchases.

Therefore, the electricity supplier platform has to supplement the two or three line fashion brands with higher consumption frequency, or stimulate consumption by the time consuming rush mode.

"Luxury goods are competing with some of the less expensive goods on the same stage, which is not what luxury brands would like to see."

In addition, in order to ensure the noble price system and brand image, luxury brands are very strict in controlling channels, and the top brands are never sold in unauthorized channels.

This successful operation means that the profit margins of those goods purchased through overseas buyers or dealers are limited.

According to Huang Ruo, the high price of luxury goods is beyond imagination. A large part of its cost is used for style design, marketing, and dissemination. The cost of manufacturing and processing alone accounts for only a small part of its selling price, which is totally different from other popular brands in terms of cost structure.

Therefore, the popular brand's efforts to win more sales and profit margins through discount and low price are not applicable in the luxury industry.

The price of the brand like LVMH is ten times or even tens of times higher than that of the same brand.

As a channel trader, the electronic business platform may create the sense of dignity of the website, but it can not carry the connotation of the brand, nor can it provide more services and share the added value of the brand.

Way out: product or service?

According to the data provided by Boston consulting company, online sales of luxury goods in China account for only 3% of the total, while the United States has reached 12%.

Luxury electric providers still have a long way to go, but the existing models do not have long-term survival value.

"When you are involved in an industry, we must thoroughly understand its operation mode and user purchase characteristics. Only by exploring opportunities and expanding space on this basis can we establish sustainable development.

Simply using discounted prices, using tail goods, and selling cheap Chinese cabbage at the farmers' market to try to sell luxury goods online, there may be a sensation, but it can't last.

Huang Ruo said.

What is the way out for luxury goods providers? Huang pointed out that first of all, it depends on whether they can get the trust of the brand and ensure adequate supply of goods. Secondly, we must ensure that products and services are driven rather than relying on prices. Finally, we must accurately identify the users of luxury goods.

Huang Ruo introduced two more promising business models to the billion power network: one is a traditional retailer, and the other is a line of cooperation with the branding line, with sufficient supply; online sales of luxury goods can achieve genuine price, such as Yintai network.

The other is a quasi luxury business model, inviting top luxury brand designers to enter the website and sell their designed products with exclusiveness, such as the net-a-porter.com in the UK.

In addition, the subdivision of the luxury goods e-commerce is also not to be underestimated.

According to the latest data, companies such as Kelan diamonds, diamond birds and so on, last year's performance is enough to make all the luxury goods providers smile.

The characteristic of these companies is to focus on subdivision, create Internet own brand and gain higher profit margins.

The combination of online marketing and physical service system is also an option for luxury electric providers in the future.

For example, Kelan diamond has set up a physical experience store in 24 cities across the country, with a monthly sales volume of 10 million, of which 70% sales are completed through online booking and offline pactions.

As for those companies that have completely chosen the brand sale mode, there are not many opportunities to go back. They may no longer be counted into the category of luxury electric business.