The Digital Luxury Group has released an exclusive white paper on Luxury e-commerce industry, offering luxury brands an overview of the platforms available on the market and what to expect.
Key takeaways from this study:
China accounts for the half of total global ecommerce spend
Global retail market stands at $28 trillion, roughly one tenth of which ($2.304 trillion) is accounted for by ecommerce in 2017. Of this number, $1.149 trillion (7.18 trillion yuan) comes from China, which is nearly 50% of the total global ecommerce spend.
Luxury segment is still evolving in China e-commerce landscape.
China’s luxury e-commerce landscape is nascent, with a limited few pure players that manage to bring together both extensive product ranges and consumer appeal. While many mass market brands are generally on e-commerce platforms, the number of luxury brands available through these sites continue to be modest.
Website, APP, and within WeChat – 3 key touchpoint for luxury segment customers
On digital, majority of the Chinese luxury e-commerce platforms transact on three touch-points – website, standalone app, and within WeChat. Only 5 have delved into transactional WeChat Mini Programs. One exception being Secoo which has offline “Experience Centres”, which are essentially physical stores that allow consumers to directly interact with products. This is part of Secoo e-commerce omnichannel ecosystem.
Authenticity and credibility are the main challenges
Being the world’s top consumers of luxury products, Chinese luxury e-commerce shoppers remain concerned about product authenticity. Establishing credibility and trust is an important task for all brands in the luxury segment.
Strategic partnership the key to growth
As the battle for e-commerce supremacy between JD and Alibaba continues in China, both tech giants have gotten more aggressive in their efforts to expand their influence. Forming of strategic alliances with existing platforms and creation of new ones, increases the complexity of the China’s ecommerce landscape.
Consumer habits are the same
Similar to the mass product Chinese e-tailers, luxury e-commerce platforms in China provides similar set of features and services. They improve the customer experience through hassle free returns, payment upon delivery, and service support from pre- purchase to post-purchase. This help to reinforce ease of purchase and trust in the experience.
Payment on delivery still a major payment mode
Despite being a more digitally evolved market when it comes to payment, COD is still an important payment mode.