Prada Wants To Set Up Its Own E-Commerce Platform In China

According to the world clothing shoes and hats net,

In the vicinity of the Nanjing West Road business district in Shanghai, where the soldiers are fighting, the former residence of Rong Zongjing, one of the first generation of industrialists in China, has been standing for nearly a hundred years. Recently, the old house has become a major stronghold of a luxury group in China.

In 2011, Prada Italy luxury group (

A six year old renovation of the old house has been launched, which will be the venue for various activities held by the group in China, with a view to further drawing closer ties with Chinese consumers.

China's importance in the global luxury market is once again highlighted.

According to the medium-term financial report released by Prada in September 8th, the Greater China region has become the only global sales highlight in the first half of fiscal year 2017. The net sales in the region increased by 5.2% over fixed exchange rates, 6.6% in Europe, 5.8% in the American market, 14.2% in the Japanese market, and 13.1% in the Middle East.

"Luxury consumers in China and abroad

They all play the leading role. They buy more than 500 billion yuan of luxury goods annually (1/4 of them are consumed in the mainland of China), accounting for almost 1/3 of the world's total.

We expect that by 2025, the global luxury market will reach 2 trillion and 700 billion yuan, and Chinese consumers will continue to play the leading role, and the contribution to the global market by 2025 will reach 44%.

Benjamin Durand-Servoingt10, partner of McKinsey Global deputy director, said in a written interview with the economic news reporters on twenty-first Century 17.

Prada's pformation is slower than expected financial performance under pressure.

6 years ago, the choice of Prada IPO also showed the importance of the Chinese market.

In 2011, after several failed capital markets, the company officially landed on the HKEx in June of this year, becoming the first world luxury company to list in Hongkong.

At the beginning of March 2013, Prada's market value once exceeded 200 billion Hong Kong dollar mark.

At present, however, its market value has dropped to HK $about 70000000000.

Recently, in the global macroeconomic recovery environment, the luxury industry experienced a cold winter began to recover.

However, Prada's share price is still weak in a large number of listed luxury companies.

The leading French Open Cloud group's share price has risen nearly 50% so far this year, while Prada's gain is around 5%.

In recent years, Prada's performance has not been satisfactory. Its total business revenue has declined for three consecutive years, and net profit has declined for four consecutive years.

The group's 2017 interim financial report, released in September 8th, showed a total revenue of 1 billion 468 million euros in the first half of fiscal year 2017, down 5.5% compared to the same period last year. Net profit was 115 million 700 thousand euros, down 18.4% from a year earlier.

A number of institutions have cut their earnings forecasts.

"Our business pformation looks longer than expected, but we believe that the direction is correct.

In many markets, the economic objective environment is still very challenging; in terms of the product itself, we have been focusing on high-end products in the high price range, and may have missed some opportunities for lower price ranges. We are planning to launch new products to recover these lost territory.

Our performance in high-end products is very good, and the bags priced at Euro 1800 or above are good sales in Europe, but bags in the lower price range have very large market opportunities, and we will invest more in this area.

In October 12th, Stefano Cantino, Prada group's strategic marketing director, admitted in an interview with the twenty-first Century business reporter.

In recent years, with the change of luxury consumption behavior, luxury brands are facing pformation urgently.

"In the business world, digitization has been on fire for a long time, but the collective reaction of the luxury goods industry is lagging behind. At this stage, the industry is still in the early stage of digitalization.

The digital pformation of the industry includes multiple dimensions, first of all, to provide consumers with seamless online offline experience, followed by a better understanding of customers to enhance intimacy with customers, and more importantly, the diversification of sales channels, including e-commerce, and the digitalization of the product itself.

By 2025, the global online luxury sales will reach 70 billion euros (540 billion yuan), and the Internet will have an impact on 90% of its sales. Based on this potential, we have observed that most brands are accelerating the pformation of digital products.

Durand-Servoingt says.

Luxury brands are turning to digitalization and being younger.

In recent years, Gucci has often been cited as a successful case of "turning over" brand. The brand suffered the worst performance in the past 4 years at the end of 2014, but in the fourth quarter of 2015, it lost its profit in the fourth quarter, and then recorded two digit income growth in the three quarter of 2016. Sales in the first half of this year increased 43.4% year on year.

Industry analysts pointed out that the key to its counterattack is to boldly turn to younger and digitalized (electricity providers and social media), which sold half of its sales in 2016 from the millennial generation (1984-2000 of the population born), with digital investment accounting for 35% of its investment.

Prada group launched the digital pformation in 2016. According to Cantino, the group hopes to establish links with the younger generation through digitalization and the development of cheaper products.

"We have improved the digital Department recently at headquarters and subsidiaries, and appointed a new director at Milan headquarters to take charge of the digital pformation of the group.

An e-commerce platform has also been set up, and the e-commerce platform in China and other parts of Asia will be officially launched by the end of this year.

The electricity supplier is not only a sales channel itself, but also hopes to establish new dialogues with potential consumers through this channel, especially the younger generation.

It is estimated that by the end of this year, the electricity supplier will account for 5% of the total sales.

At the same time, we do not plan to reduce entity sales network in China. The main goal is to make online and offline better interaction and integration.

In addition, the digital portion of media expenditure will account for 40%, which is not far from this goal.

Cantino said.

Cantino also said that Prada's top priority in China is to set up its own e-commerce platform and channel, and then consider the third party retail business platform.

At present, another trend in the luxury industry is to use "net red" to cater for young people.

Recently, some luxury brands have launched the "net red" case in China, causing a lot of controversy.

"We have cooperated with Chinese bloggers in the Chinese market, and of course there will be more opportunities for dialogue and interaction with them in the future.

But at the same time, we must keep the identity of the brand consistent with the brand concept. We should not be able to screen the target very selectively because of the unlimited and unprincipled expansion of opportunity.

There is already a candidate list of brand ambassadors, but it is not yet announced.

Cantino said.

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