The Brand Side May Throw Away The Distribution Of "Crutches" Electricity Supplier Unlimited Potential.

The luxury brand has long been known for its "beating the bridges": after the third party has gained popularity in the strange market, the agency has been relocated to direct operation.

Just this year, the right to recall China is Michael Kors, secret of Vitoria, Tommy Hilfiger, Calvin Klein, Burberry, and then push forward, Hugo Boss in 2014, Bally and Coach in 2008.

Luxury brands are usually sold in two ways: distribution (distribution, such as distributors and multi brand stores) and retail (retail, such as brand Direct stores).

The reporter has learned that apart from a few brands such as LV, Gucci, Hermes and so on, to enter China directly, most luxury brands will choose to rely on distributors and agents to expand the range of radiation when they are short of capability. They have the advantages of low investment and small risk.

After being familiar with the target market or strengthening its own strength, the brand side may throw away the distributed crutches and embark on the retail Road.

As we all know, for the long term development of brands, luxury brands are very cautious about choosing online channels and partners.

The direct communication between domestic electricity supplier and brand side is very rare. On the one hand, the platform relies on overwhelming traffic barriers to attract the gold diggers in China. It is more than the European liberty of New York's free goddess 100 years ago. On the other hand, under the plunder of big platforms, small and medium-sized electricity suppliers can only choose to marry with distributors and agents.

Is it really so difficult for an e-commerce provider to directly connect up with luxury brands? Recently, Yue Rencheng, founder of ESTATE, shared several tips in the online forum "cross border import 100 people talk".

Euromonitor International latest data show that after three consecutive years of negative growth, sales of luxury goods in China have gradually revival this year. It is estimated that this year will reach US $76 billion and will become the second largest luxury market in the world.

"China is a big market, and they all want to run the Chinese market well.

However, Chinese companies are numerous and miscellaneous. For luxury brands, it is difficult to tell the business model of a Chinese company. They do not want to give authorization or distribution rights to an unfamiliar company without examination. "

Yue Ren Cheng said.

Speaking of qualifications for establishing diplomatic relations with luxury brands, Yue Rencheng mentioned three basic abilities: language communication skills, general knowledge of international trade, organization of pport and ability to pass customs and commodity inspection.

In addition, recognized offline entities are very important addition points.

"If there are very good physical shops in the country, such as in the good Mall (shopping mall), and adjacent to high-end international brands, it will be easier to communicate with brands."

Admittedly, offline sales in Europe and North America are facing many difficulties: first, there are no emerging department stores and commercial buildings such as China; second, the sales of the most popular multi brand stores have been reduced, and more brands have chosen to open direct stores, but this has increased the pressure of operating costs; third, the interests of franchisees need to be considered to some extent.

However, according to the statistics of luxury goods market in 2014 by L2, a survey firm, only 3.6% of luxury goods come from online, 8.5% of light luxury brands, and 7.5% of Aspirational Luxury between two.

Overall, e-commerce channels account for about 6% of the sales revenue of luxury brands.

So, for

The entity store is still an important way to display brand image and promote sales.

Yue Rencheng told reporters that after passing the basic qualification examination, China needs to know which e-commerce platforms and what prices will be sold for the brand goods.

"Because most luxury brands are not just for short-term sales, but also focus on brand value and long-term development. They are very concerned about the follow-up sales link."

The role of the electricity supplier should not be underestimated.

From 2009 to 2014,

The online proportion of sales revenue rose from 2.6% to 6.3%, and more importantly, 6.3% increased by 80%.

L2 expects the ratio to be between 18% and 20% in 2025.

At present, the number of electricity suppliers in the industry has exceeded 10%, for example, Kate Spade has 15.2%, Coach has 12.1%, Ralph Lauren has 10.5%.

However, China and Europe and the United States do not seem to have the same understanding of electricity providers.

Yue Rencheng told reporters that in Europe and the United States, the development speed of e-commerce is slower than that in China, and is regarded as the same sales channel as physical stores. Taking into account the interests of franchisees and other factors, the price is strictly controlled.

In contrast, luxury brands believe that a lot of Chinese e-commerce companies will get a big discount after they get the goods, which is harmful to the brand's long-term planning.

Because the overall economic environment is depressed.

Also willing to participate in the activities of the electronic business platform, but still strictly control prices and styles, etc., formally authorized Chinese partners before discount, usually need to communicate with the brand.

"The heavier the brand is, the more stringent the price control is. It will tell the partners how much money a commodity can sell at somewhere, and the discount time and intensity should be synchronized. For example, we have some cooperative brands that can not participate in the" double one ", all of which have had agreements before.

Yue Ren Cheng said.

Finally, it is worth noting that luxury brands are beautiful and beautiful, but there are risks associated with them.

Yue Rencheng told reporters that, especially in the context of online market maturing, the brand will also choose more direct business in the future.

Because affiliate mode is sure to expand revenue, but it often restricts the development of online.

"If the online sale is cheap, the dealer will object to it. After weighing the gains and losses, the brand may take back the distribution rights under the line, such as Zara and H&M, which are all under the control of the online and offline businesses, and O2O is more successful.

Before the Internet, every brand in the new market should adopt the franchise mode.

But Zara and H&M are relatively late in China, so the online and offline are self-employed to facilitate the coordination of prices and ensure that the goods are not outflow.

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