On The Eve Of 618, Luxury Brands Have Bets On Jingdong.

After nearly 5 years of storage, Jingdong has finally seen a bumper harvest in the field of luxury goods.

According to fashion business news, Italy luxury group PRADA, which hosted the 2020 spring and summer men's wear show in Shanghai last week, has signed a strategic agreement with the Jingdong. Its Prada, Miu Miu and Car Shoe plans to enter the Jingdong 618 period and have 2019 new products in autumn and winter. Since June, the two brands of Prada and Miu Miu have also officially launched products on the Jingdong's luxury electric business platform Temple store. Previously, Prada and Miu Miu mainly sold products in China through the official website.

A week ago, the Prada brand also released the 2019 autumn winter men's clothing series "almost human", directed by the artist Cao Fei and the Chinese new generation idol star Cai Xukun KUN. This Italy luxury brand's determination to conquer the Chinese market is more and more obvious.

PRADA Group CEO Patrizio Bertelli admitted earlier that the group needed to enhance its control over the Chinese market. After detailed analysis of the wholesale channel structure, the board began restructuring its independent partner network in China in May of this year.

Some analysts pointed out that Prada's choice of joining Jingdong in such a critical period reflects to a certain extent that Jingdong has become an indispensable part of the luxury brand's contact with Chinese consumers, and 618 is undoubtedly a good starting point. After 16 years of development, Jingdong 618 has become one of the most anticipated shopping festivals for consumers nationwide.

It is reported that this year's Jingdong 618 will be the largest in history. More than 90% of the core brands will release millions of new products during the Jingdong 618, and create a full channel consumer experience under the joint million line stores. The 618 marketing campaign led by Jingdong will cover 750 million consumers, which is a huge flow pool for Prada.

On a series of moves, Prada opened up 4.92% to HK $23.45 on Monday, and its market value exceeded HK $60 billion.

Jingdong is more than Prada. According to fashion business express, nearly 20 luxury brands have been in Jingdong in the past 2 months. There are many mainstream designers and luxury brands such as DKNY, Moschino and Mulberry, such as:

In January 16, 2019, New York fashion luxury brand DKNY officially entered Jingdong.

In March 11, 2019, the first online flagship store of MOSCHINO underwear and swimsuit was settled in Jingdong.

In April 8, 2019, Tissot set up an authorized flagship store in Jingdong.

In April 10, 2019, Sandro entered Jingdong to open its flagship store.

In April 16, 2019, Maje entered the flagship store of Jingdong brand.

In April 29, 2019, the MOSCHINO main line officially entered the Jingdong.

In May 9, 2019, Giuseppe Zanotti landed the new products of spring and summer on the Jingdong.

In May 15, 2019, Paul Smith opened the first official authorized flagship store in China in Jingdong.

In May 22, 2019, Mulberry landed the Jingdong with 2019 new autumn and winter products.

And behind this is the continuous improvement of Jingdong's own strength. In the first quarter of March 31st, Jingdong's net revenue grew 20.9% to 121 billion 100 million yuan, and net profit rose 387% to 7 billion 300 million yuan. In the 12 months ending the end of the reporting period, the total number of active customers in Jingdong reached 310 million 500 thousand. The number of active customers in the first quarter increased by 15% over the same period last year. In September last year, Jingdong announced its first payment membership for the first time. As of September 6th, Jingdong PLUS already had more than 10 million members in the mainland alone.

A large number of users and traffic and multi-channel layout is the biggest bargaining chip in Jingdong's hands. However, there is still confusion about why the luxury brands have changed and gradually accepted the 3C based Jingdong. In the past 5 years, the fashion business Express has found that Jingdong has a great change in the fierce online luxury market competition, that is, to achieve the ultimate goal of the Jingdong.

In fact, being aware of your weaknesses is an advantage. In the eyes of outsiders, the past Jingdong seems to have nothing to do with luxury fashion, but its strict and prudent style and corporate culture of honesty and integrity are the essential qualities of the luxury industry, and become the most solid cornerstone of its luxury industry.

Initially, Jingdong chose to start from the relatively low fashion industry, extending from the existing user groups, gradually cultivating its platform consumers' interest in fashion and causing consumption. Generally speaking, Jingdong's strategy in the fashion industry can be divided into two routes: one is to provide platforms for original design power, the other is to internationalize and customize routes, and the two play a synergistic effect for the online apparel market.

In September 2015, Jingdong hosted the fashion luminous release show in Milan, bringing the Chinese designer's original brand to Milan fashion week, becoming the first Chinese designer brand to visit the Milan women's fashion week for the first time ever. In September 19, 2016, Jingdong joined six local high quality Custom Brands in London Fashion week to host the "Beijing system" fashion show. There are also custom channels on line with the Beijing fashion show in London. This is one of the signs that Jingdong is trying to bring its fashion industry to a more advanced level. Through this channel, consumers can quickly find custom service providers suitable for their needs, and do self-service order customization.

In 2017, Jingdong's fashion ambitions became more and more evident. In April 13th, a series of "Jingdong day" activities were held in Shanghai fashion week. In November of the same year, Jingdong formally announced cooperation with the Fashion Designers Association of America CFDA/Vogue fashion foundation to help young designers in the United States smoothly enter the Chinese market and achieve seamless docking of the largest online market. In February this year, Jingdong and the British Fashion Association BFC also signed a 3 year strategic cooperation agreement.

Compared with fashion week's relatively superficial presentation, Jingdong's cooperation with CFDA and BFC further deepened its platform's ties with international fashion. It also meant that Jingdong was officially bidding for the competition of outstanding designers abroad, and advanced the difference between themselves and other competitors.

From that point of view, namely, buying, customizing, and cross-border cooperation to support Chinese designers, Jingdong successfully stepped on every hot spot of fashion industry in every period, and conformed to the inevitable trend of consumption upgrading. When millennial consumers are more willing to purchase personalized and fashionable products, the proportion of clothing consumption is also rising.

On this basis, Jingdong finally took an important step on the road to the luxury industry in the seventh of July in 2017. The 157 year old Swiss luxury jewellery watch brand Chopard Chopin has been admitted to the self flagship store, which has been sold by the brand to select the most representative products. The self run mode is equivalent to developing another online fashion business, which requires a very high quality of buyers.

It is noteworthy that this is the first time that Chopin has entered the third party e-commerce platform in China. It has not only pioneered the new sales platform outside its boutique, but also aims to bring more shopping experience and more considerate brand services to more Chinese consumers.

When the domestic fashion business is still in the exploratory stage, Chopin's entry is undoubtedly a big affirmation of Jingdong's competitiveness in the field of luxury goods. Subsequently, Salvatore Ferragamo and Hermes's luxury brand "up and down" also opened its own flagship store in Jingdong last August.

While training the platform's own fashion genes and tonality, Jingdong also enriches the platform resources through continuous investment. In June 2017, Jingdong announced that it had invested $400 million in the global luxury fashion shopping Farfetch, which has a better business foundation in China and is the preferred partner of 200 high-end luxury brands and more than 500 boutique boutiques.

In October of the same year, Jingdong launched the Toplife luxury platform, but the platform was merged into Farfetch China at the end of May this year. Farfetch has also entered Jingdong in the form of first level entry in 618 this year. In this way, more than 300 million of Jingdong's active users will be better connected with the more than 1000 luxury brands and boutiques covered by Farfetch, so as to maximize the benefits.

Last July, Jingdong joined hands with LVMH's investment fund L Catterton Asia to inject $175 million into Temple Bank. Subsequently, Jingdong separated luxury business from the men's luxury department and set up the luxury department of the two level department.

In Jingdong's view, cooperation with luxury brands should not be limited to the "surface business" of shops. The focus is on the integration of supply chains, so that brands can reach accurate customers through all channels.

With the popularity of smart phones represented by Apple iPhone in China, the use of mobile devices by Chinese young consumers is more frequent than that of computers. Mobile phones with payment function are gradually replacing the purse status. In a highly socialized era, owning an electronic business platform is more economical and efficient than opening stores in every potential market. This is the main reason for changing the attitude of luxury brands.

Unlike PC and European consumers, Chinese consumers do not have the habit of shopping on the official website of the brand. Instead, they jump directly into the mobile terminal. The habit of shopping on Taobao, Tmall, Jingdong and other super e-commerce platforms has been deeply rooted. Once these super APP can provide enough quality luxury shopping experience, Chinese consumers will not hesitate to choose to buy luxury goods from these channels.

Therefore, if luxury brands want to get bigger development in China, WeChat is the most difficult to avoid. The rapid rise of the app has prompted many luxury brands to scramble to establish their official accounts in WeChat. According to the latest Tencent first quarter performance report released in 2019, the number of monthly active accounts of WeChat and WeChat has reached 1 billion 112 million, accounting for 80% of China's 1 billion 400 million population.

Benefiting from the strategic partnership with WeChat's parent company Tencent group, Jingdong has occupied a place in WeChat early in the day. It is the only Chinese e-commerce platform that has direct access to WeChat. WeChat also increased its search function in the beginning of this year, which means that consumers do not need to switch App to complete a series of behaviors such as purchase, order and payment in WeChat. Luxury brands on the platform can also reach as many Chinese consumers as possible through WeChat.

At the same time, Jingdong is also committed to providing consumers with the best online shopping and the ultimate logistics service. Under the promotion of the 7 major logistics centers and 335 large warehouses in Jingdong, consumers can enjoy the service delivered on the next day, and the "express service" of the "Beijing Zun Da" advanced in China is consistent with the requirements of service and unique experience.

In some luxury brand owned stores, Jingdong also provides full channel retail services such as "online payment, offline pick up" and store return, in order to strengthen the relationship between brand entities and Chinese consumers. Jingdong's high quality and efficient logistics and delivery service is clearly a bonus for attracting luxury brands.

In order to attract more luxury fashion consumers, 3C's Jingdong set up a new joint venture with mogujie.com, China's largest female fashion social and shopping guide platform, in January 2018 to attract more female consumers through richer products and innovative shopping experience. According to the data, mogujie.com has over 200 million registered users.

At this point, Jingdong not only enables luxury brands to more accurately touch Chinese consumers, but also links up online technology advantages and offline services to achieve a shift from shopping websites to more three-dimensional virtual stores. For the millennial generation of digital aborigines, smooth and comfortable e-commerce platform shopping experience is even more attractive and time saving than physical store shopping. The competitiveness and advantages of the "bridge" between luxury brands and Chinese consumers are becoming increasingly prominent.

"Luxury brands need to find breakthroughs in the Chinese market in a digitalized way," said Jos e Neves, chief executive of Farfetch, a luxury electronics business platform in the UK. Axel Dumas, chief executive of Hermes, also revealed at the latest shareholders' meeting that after opening China's official website in China, the next step would be to consider cooperation with Jingdong's three party e-commerce platform.

Ralph Lauren CEO Pateice Louvet said earlier that in the interview, the electricity supplier will have a certain impact on the scarcity and uniqueness of luxury brands, but if this is the place where consumers will have shopping behavior, it is the place where brands need to occupy.

Altagamma-McKinsey luxury digital marketing agency has predicted that the luxury online sales market share will double to 12% in 2020 and three times to 18% in 2025. The electricity supplier will become the third largest luxury market in the world after China and the United States. Even Prada, even Hermes, can not ignore the potential value of China's electricity supplier.

However, in order to take the initiative in this luxury brand competition, the domestic e-commerce platform must have more voice.

Recently, the Chinese authoritative high-end lifestyle Research Institute asked the guest research institute to publish the "China luxury online shopping report", in-depth analysis of the development path of the luxury electric business market, the status quo of the industry development, and the characteristics of China's online luxury shopping crowd. It is better to explain the behavior of Chinese online shopping consumers to luxury brands.

In the report, Jingdong has won three first, the most promising Chinese luxury electric business, the first index of China's local luxury electric business, and the best shopping experience luxury electric business APP.

The customer research institute further pointed out that Jingdong has obvious characteristics in the forward-looking aspects of genuine licensed goods and unbounded retail. Its emphasis on the guidance of consumer concepts and the delivery of quality service and experience has been greatly improved and optimized compared with the extensive business models in the past ten years. These practices are the key to accelerating the luxury brand to embrace the Chinese local electricity supplier.

In addition, the report also stressed that chasing fashion is not only a young person. Chinese consumers are generally more receptive to new things, and have a high degree of acceptance of new brands and new products. Therefore, it is more likely that the online business platform with frequent online releases will attract their attention and buy early adopters. According to statistics from the industry, China's high net worth people purchase more than 50 luxury items every year.

It is reported that the economically developed eastern provinces have been the main areas for luxury goods to sell on the Chinese line, but remote areas are restricted by the distribution of stores under the brand line, which is the most powerful area of luxury online sales, especially online sales from four to six cities. This will help to better penetrate China's inland cities.

Coincidentally, Bain wrote in the 2019 China private wealth report jointly issued by China Merchants Bank last week and wrote that under the environment of sustained global geopolitical shocks, the total scale of investable assets held by the whole country reached 190 trillion yuan, and it is expected to break through the 200 trillion mark by the end of 2019.

Among them, the number of high net worth people in Shandong broke through 100 thousand people for the first time, and entered the first echelon of Guangdong, Shanghai, Beijing, Jiangsu and Zhejiang provinces. The number of high net worth people in 5 provinces was more than 50 thousand, namely Sichuan, Hubei, Fujian, Liaoning and Liaoning, which also showed that the potential of China's luxury goods market was sinking gradually to the first and second tier cities.

Another report by Bain earlier this year also pointed out that Chinese consumers account for 33% of the total global luxury goods sales, which will reach 46% by 2025. The overall benefit is mainly from the millennial generation and female consumers. It is estimated that 7 years later, 50% of Chinese luxury goods will take place in the mainland of China, far higher than the current 25%.

Thanks to the good environment and the effect of word of mouth, Jingdong, which has a large number of high-end customers and huge data, naturally wins more and more luxury brands' trust. In addition to high-profile brands, high-end and niche brands have also focused their attention on platforms such as Jingdong, which have huge traffic flow, and attract more consumers through diversified ways such as joint payment, limited payment and new online distribution. At present, Jingdong and Tmall have the highest score in the comprehensive evaluation of the number of international brands, brand awareness and the frequency of new releases.

In view of the fact that the Chinese market has been the main driving force for the growth of PRADA group, Jingdong will stimulate the brand to accelerate its growth. In the 2018 fiscal year, PRADA group's sales in Greater China increased by 8.2% to 675 million euros, the most robust growth market.

While announcing cooperation with PRADA group, Jiang Ke, President of the international business division of Jingdong fashion home platform business group, said that the huge potential of high-end consumer market in mainland China is the key to attracting many luxury brands to enter China, and Jingdong has built a mature platform for value trust.

However, luxury brands want to win the Chinese market. They can not only satisfy one consumer, but need to make different strategies for different subgroups. In a time of great change, the competition between the big business tycoons has just come to the point.