Amazon Luxury Electric Business Huge Investment In An Awkward Position

After ASOS co founder and chief executive Nick Robertson said she had no intention of selling the company to Amazon, Amazon said at the end of November that it would expand its competitiveness in the UK market, and announced that it would build a 46000 square foot fashion photography studio in the London Shoreditch Xiao Di Qi District in 2015. With this statement coming out, the fashion industry and the luxury sector have different opinions. One thing is certain that Amazon has delivered a very clear signal -- as a comprehensive e-commerce platform, it must push its business towards the direction of fashion and luxury.

Amazon currently owns many fashion business platforms including Shopbop, MyHabit and East Dane. In 2013, it built the first professional studio of 40000 square feet in the Brook forest region of New York. The photo studio opened in London will be the largest in Europe. Amazon said the studio will employ 35 employees and take thousands of photos every day. It will be more likely to employ 50 free photographers in the busy season.

In 2007, European Amazon, which started online bookstore, launched online fashion products, including watches, jewellery and footwear series, and launched clothing categories in 2008. "Fashion is the fastest growing category of Amazon business in Europe. Opening up a new photography studio fully demonstrates our ambitions and the determination to provide customers with first-rate consumer experience." Amazon Sergio Bucher, vice president of fashion department of the European Union, said publicly.

　　 huge investments And embarrassment

However, Fashion business Business is not easy. Although Shopbop and East Dane seem to have made great achievements, Amazon has never disclosed the proportion of fashion products in their total sales. In fact, the group's huge investment in this category has begun to disappoint Wall Street. At the end of last month, Amazon.com Inc. announced its three quarter earnings report and the upcoming holiday season performance. The stock price crashed more than 13% on that day, and the market value evaporated 15 billion dollars.

Although Amazon is determined to demonstrate its intention to create a luxury e-commerce platform, it still suffers from difficulties and criticism in this field. For luxury brands themselves, how to strictly control the pace of marketing and promotion is the core of their brand survival besides the expensive selling price of the product itself. At this point, Amazon has seriously threatened the marketing rhythm of the fashion brand itself. Therefore, LVMH group, Kering group and Hermes group have clearly announced that they will not sell any products including beauty or accessories through Amazon. However, the search results of users on Amazon are not the same. In addition to B2C's brand licensing sales, many of the less controlled C2C third party retailers make luxury brands unstoppable. For example, Cartier repeatedly claims that brands do not participate in any e-commerce activities, but there are still more than 2000 Cartier products on sale on Amazon. "From the consumer's point of view, the products sold by third party retailers are almost the same as those from official sources," L2, the US brand digital research think tank, points out. For those brands that do not formally authorize Amazon, there are 1576 brands selling online on average, many of which are fake. This has caused many fashion brands to have a headache for Amazon's hard sell online platform. Compared with other brands, Burberry's current cooperation with Amazon is quite smart: the brand agrees to sell some beauty products online, while Amazon must restrict all third party retailers to sell Burberry products. This model is also used for reference by the domestic "Tmall".

　　 Unwilling to abandon Luxury goods Electric business dream

Despite all the difficulties, Amazon never gave up efforts to transform itself into a luxury electric giant. It has set up Endless, the main luxury and fashion product e-commerce website, for 6 years, but eventually had to close in 2012. It also added "luxury luxury" words to the subcategory (skin care, make-up, perfume, etc.) of the main website beauty category last year. But taking into account the click of the "luxury brand Luxury brand" page after the brand is not recognized by consumers as a luxury brand level, Amazon's move is not how to please.

In addition to ASOS in the UK, the market has also been rumored that Amazon has an intention to merge India Jabong. Earlier, Net-a-Porter executive chairman Natalie Massenet gathered their potential valuation of Net-a-porter from potential buyers, bankers and financial advisers, which caused a great stir in the industry. The media speculated that the group might sell Net-a-porter or let it go public. At that time, Luca Solca, director of luxury research at Paris bank, told WWD website that with the urgency of Amazon entering the luxury industry, Amazon would be the most likely buyer if the group decided to sell Net-a-porter. But neither the group nor Amazon has made any official comments on the rumours of the transaction.

Amazon's expansion strategy in China is also in progress. It has recently entered into a deep strategic cooperation with Hearst, China's fashion shopping platform ELLEshop.com.cn, to jointly build an online boutique of China's top fashion brands and introduce hot brand designers at home and abroad, but the actual effect needs to be verified.