HUGO BOSS'S China Electricity Supplier'S Adventure Road

If we can trace back the time, we can see that HUGO BOSS's trip to China's electricity supplier is a wonderful adventure. We try various models and give us enlightenment: how to make luxury goods in the Chinese market? What mode should we choose in the electricity supplier?

HUGO BOSS entered the Chinese market as early as 1994, but has always taken the form of agency.

In 2009, HUGO BOSS reclaimed the agency and changed it to direct operation.

The pition from agent to direct camp is easy to understand. For a luxury brand, direct camp can guarantee the high-end image maintenance of the brand and the management of product channel.

In the aspect of direct battalion, a large number of offline outlets have been set up, and more than 140 shops have been opened.

Sales began to flourishing, but in the 2013 fiscal year the situation began to take a turn for the worse, from the 57% high growth in 2011 fiscal year to negative growth.

According to Michel Gutsats, an expert at Marseilles college in France, the problem with HUGO BOSS is that there are too many outlets, too many luxury stores and too many exposures will make them look less high-end.

This is probably the reason why HUGO BOSS began to do business in 2013.

In 2013, it opened its own official online store. In September 2014, its BOSS and BOSS Orange brands entered the flagship store, and then in November, its Boss Orange entered Tmall's official flagship store. Now, HUGO BOSS is trying new ones again.

From the brand flagship store to the brand merchandise authorized Jingdong operation mode.

The development of HUGO BOSS in electric business has gone through three processes: official website, brand flagship store, and brand merchandise authorization.

But the encounter with another luxury brand Burberry may explain some problems.

According to reports, Burberry entered Tmall in April 2014 and became the first international brand to enter the third party website.

However, the newspaper reporter survey found that although Burberry user evaluation is good, but the return rate as high as 26.4%, far exceeding the average value of 7.21%.

Moreover, Burberry's official website price is higher than the purchasing price 30-40%, making the sales volume lower.

Burberry's official website store and Tmall flagship store are almost identical, with almost identical sales and all the same prices.

Why change?

Comparing the three business models, it is easy to see the clue.

The official website is mostly displayed and the traffic is very small. The third party brand flagship store can get the brand marketing exposure with the huge flow of the platform.

But because most of this mode is done by the luxury brand itself, it is difficult for HUGO BOSS to understand the market and provide better services to users. It is also difficult to find talents who know both luxury and e-commerce.

Therefore, the flagship store is also the purpose of brand promotion, which is limited to the sale of goods.

On the other hand, the mode of brand merchandise authorization and mature e-commerce self employment is expected to achieve the organic combination of brand promotion and commodity sales.

Taking Jingdong and HUGO BOSS as an example, Jingdong's high quality user groups, strong self built logistics and standardized customer service levels can make up for the fact that HUGO BOSS is not familiar with the Chinese market and does not understand the problems of e-commerce operation, so that it can better protect the consumer experience.

Moreover, the layout of Jingdong in PC, mobile client, WeChat, mobile QQ and other channels also provides protection for HUGO BOSS brand.

The cooperation between HUGO BOSS and Jingdong is not simple.

On the one hand, it indicates that Jingdong is starting to exert power on luxury electric business, and the focus of its efforts will be brand authorization and direct sales. This will help to give full play to the advantages of Jingdong's self operation, protect users' genuine products, and protect the brand's exposure and merchandise sales for brands.

On the other hand, if the cooperation between Jingdong and HUGO BOSS can achieve results, it will have a strong demonstration effect, and it will also open up a new mode for luxury electric providers.