Why Did The Two Luxury Goods Businesses Fail In China?

< p > "in the long run, we are interested in the international market, but there is no plan for further expansion in China." Messi, senior vice president of department store Jim Sluzewski told reporters. The reason why "pause" is because the < a href= "http://www.91se91.com/news/index_c.asp" > Messi < /a > department store has set a timetable for the Chinese market. In May 2012, it entered the Chinese market by injections of $15 million into the local flash buying website Jiapin net. According to the original plan, it should have turned Jiapin net into Messi's department store e-commerce website in China in June 2013, selling positive price instead of discounted goods. But these failed to come true. < /p >
< p > March 2012, < a href= "http://www.91se91.com/news/index_c.asp" > Neiman Marcus < /a > also chose to inject $28 million into the glamour of flash shopping website, and launched its e-commerce website at the end of 2012, and set up an operation center and warehouse in Shanghai by Glamour's localization advantage. In March 2013, Neiman Marcus held a spectacular brand show in the Bund, and invited global marketing director Ken Downing to help. However, a few months later, it quietly and hastily laid off more than half of its staff and closed the Chinese warehouse. Lindy Rawlinson, the general manager of China's operations, also withdrew to the United States. < /p >
< p > "just opened a meeting time, everything has changed," a former Neiman Marcus Chinese employee told reporters, "a little hasty ending." She disclosed that the move was mainly due to "wanting to see returns quickly, but in the short term the performance is not up to expectations". At present, the Chinese website of Neiman Marcus is still in operation, but warehousing and logistics are moving back to the US control cost. < /p >
< p > any a href= "http://www.91se91.com/news/index_c.asp" > high-end retail brand < /a > it is difficult for China not to generate optimistic expectations and ambitious ambitions. According to McKinsey's report, China accounted for 25% of the total global luxury consumption in 2012, and this ratio will increase to 34% by 2015. More and more people began to buy luxury goods online. A report published by Observer Solutions, a market research and consulting firm, said the volume of China's luxury goods e-commerce market increased rapidly from 6 billion 400 million yuan in 2010 to 18 billion 900 million RMB in 2012, and is expected to reach 27 billion RMB in 2013. < /p >
< p > "in China, the most likely mistake for foreign brands is not to rush in, but to slow down." Kelland Willis, Forrester e-commerce strategist at market consultancy, told reporters. Messi and Neiman Marcus obviously belong to the former. < /p >
< p > "some people may think that the Chinese market is so huge that they can earn a lot of money in a short time. Personally, I can't agree with this idea. The world's largest luxury goods business YOOX Group founder and global CEO Federico Marchetti told reporters. In 2010, YOOX began to set foot in the mainland of China with emporioarmani.cn, Armani's cooperation website. In the past two years, 9 high-end e-commerce websites were launched, including Bally, Alexander Wang and so on. < /p >
< p > Marchetti has repeatedly stressed to these brands, do not expect amazing sales in the first quarter or the second quarter. "We are recommending to their Chinese customers something very new to them that they have never met before and need to invest continuously." Marchetti said. < /p >
< p > excessive urgency makes Messi and Neiman Marcus's first decision in China wrong: choose discount websites as partners. It seems that this is a shortcut: these websites have accumulated a certain amount of traffic and have a complete set of team and business models. < /p >
< p > but creating a cross cultural team will encounter many unforeseen problems. "Especially in the fashion industry, products change quickly, and if communication costs are high, then efficiency is bound to be reduced." Zhao Shicheng, the founder and CEO of the Shang Shang network, a local supplier with the characteristics of the buyer's system, told reporters. < /p >
More importantly, consumers who pay close attention to and buy large discount products on the Internet are not the target consumers of P. < /p >
< p > "these websites are quite different from their customers in the United States, which is the same from the choice of products, description, customer service and page design," Willis said. "So they have lost their original positioning and brand image in China." < /p >
P e-commerce websites in China are hard to match these high-end brands. "On some websites, you can see a $1000 bag next to $20." Forrester said in a May 2012 report on luxury electric business in China. In terms of product multi angle pictures, composition instructions, and methods of care, details are particularly unsatisfactory. < /p >
< p > therefore, it is difficult for them to attract high income groups who are more sensitive to brands than price. Their demand for online shopping experience is similar to that of a physical store, and this is exactly one of the major challenges facing luxury goods in e-commerce. < /p >
< p > "online and offline is a world." We can't tolerate a brand that sells discounted goods online, but its stores are resplendent. Marchetti said. < /p >
< p > according to McKinsey statistics, in 2012, 8% of online buyers bought luxuries, and the Internet is only a channel for most people to understand brands and products. People are more willing to buy them in stores with leather sofas. < /p >
"P > many brands have chosen to build their own websites to try to change the status quo. < /p >
This is the case with P. The e-commerce platform was launched at the end of 2011. After 3 years of investment, link Crawford hopes to rely on Technology in 2014 to enable users to check their wish list on their home page, enter platinum VIP rooms, book personal image consultants and so on. "We hope that we can make seamless connection between them in the future - consumers can shop online or shop in stores, all information is synchronous." Andrew Keith, chairman of Lian Ford group, told reporters. Lian Kai Buddha's first physical store in Shanghai has just opened, and this is the company's return to the market after it has been damaged in the mainland of China. < /p >
< p > but this obviously requires a lot of input and is only the first step. < /p >
Another key is: what products do Chinese consumers want to see on the website? Are they traditional brands such as LV or GUCCI, or those designer brands? Neiman Marcus chose the latter, P. It has tried to position itself as an online fashion consultant, and the professional buyer team has been winning the fashion of the season for customers. This strategy has been a great success in the United States. However, the effect is not obvious in China. < /p >
< p > "it has been said that the Chinese market can not accept the Western department store mode which is mainly guided by shopping. I am very dissatisfied. Chinese customers have strong demand for overseas brands and fashion, so long as you can provide the products they want and meet the expected services, they are willing to enter any store. " Kelland Willis believes that the haste of Messi and Neiman Marcus has made them miss the opportunity to become a taste maker rather than a retailer in China. < /p >
< p > "in the final analysis, for all high-end retail brands, entering the e-commerce field in China is a must and no shortcut." Kelland Willis said. < /p >