Luxury apparel brands set up shop on Tmall as demand falls in mainland China
Global players are tapping the mainland online retail market as demand for luxury goods looks set to decline for the first time in 10 years
Luxury apparel brands are launching online stores on Tmall amid falling demand on the mainland as the country's luxury consumption is expected to decline this year for the first time in a decade, says Fung Business Intelligence Centre.
The research arm of garment and consumer goods supply chain giant Fung Group said in a report on China's apparel market released yesterday that luxury apparel had seen a significant drop in sales in China, although the country remained one of the most important markets for global luxury retailers.
Global luxury players have adopted a number of strategies in China to cope with the declining demand, according to the report, including tapping the online retail market.
Burberry launched its online store on e-commerce powerhouse Alibaba's business-to-consumer platform Tmall in April, the first time an international luxury brand entered the third-party online shopping platform in China. Calvin Klein followed suit and launched its Tmall store in August.
Hugo Boss bought back a 40 per cent stake in its Chinese mainland and Macau joint venture from franchise partner Rainbow Group. At the same time it also opened an online store on Tmall for its more affordable line Boss Orange.
On the other hand, Max Mara ramped up its presence in China by opening its largest Asian store in Beijing and is planning to open 25 to 35 new stores in China every year.
The mainland's luxury sales growth started to slow in the fourth quarter of 2011 and is expected to decline 2 per cent year on year to reach €15 million (HK$143 million) this year, which would be the first decline in more than a decade, according to estimates by consulting firm Bain & Company.