China e-commerce contender Vip.com takes on JD.com and Tmall for slice of fashion pie
China’s third largest e-commerce platform is strengthening its international portfolio and expanding in major markets, but can it compete with China’s online giants?
It’s no secret that China’s two leading e-commerce giants are pulling out all the stops to gain a significant share of the online luxury market. But there’s a third e-commerce player in the mix with big ambitions: to introduce its more than 320 million customers to a wider world of fashion and put China’s own designer talent on the global map.
Vip.com is one of the fastest-growing e-commerce platforms in China, with annual retail sales of US$11.2 billion. Like Tmall’s Luxury Pavilion and JD.com’s Toplife, the retailer is a major draw for luxury brands looking to sell to China’s booming online shopping market.
Vip.com’s head of global buying Hillary Wang is careful to note how the platform differentiates itself. “We stand out from JD.com in that we are very women-centric,” she says.
“About 80 per cent of our shoppers are female; with JD, it’s the opposite – 80 per cent are male. And women control the family wallet.”
It’s this group they intended to woo when they announced earlier this summer they would be pursuing more aggressive expansion of their US brand offerings. To date, they’ve sold about US$2.2 billion in US merchandise to Vip.com customers, and they’re aiming to triple that number by 2020, Wang says.
Already, the online retailer, which boasts about 6,000 brands altogether, has two offices in the United States – one in LA and one in New York, opened three years ago – and they employ 20 buyers, as well as host a regular stream of events, road shows and seminars. During the latest rendition of Magic, a biannual fashion trade show in Las Vegas, Wang announced Vip.com signed up 10 new US brands, including emerging designers.
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“Chinese consumers are hungry for new and undiscovered international brands,” Wang said in a statement. “We believe that bringing these companies to the Chinese digital market gives them a chance to jump-start their businesses in a way that they cannot in other markets.”
But for most customers, Vip.com’s main perk is providing deals on well-known affordable luxury and high-end labels through flash sales and other discounts.
Marc Jacobs launched its first online flagship store with the retailer late last year through Viplux, Vip.com’s channel hosting exclusively high-end and premium brands. Its first season showcased “sporty street style” with a collection of corduroys, plaids and knitwear.
Marc Jacobs is among the US brands seeking to take advantage of Vip.com’s customer loyalty, which Wang says is a reflection of both positive user experience and a system that relies on big data to curate items based on their customers’ preferences and shopping behaviours.
“We are very scientific about what we do,” Wang says. “We know what kind of price ranges, what kind of styles, what kind of colours, and what kind of products they buy, and we buy the merchandise they're interested in or they have previously showed interest in.”
“But our consumers are not only hungry for merchandise, they're hungry for information – what are the latest fashion trends in New York, what are the latest fashion trends in London – and we want to be the window for them into the overseas market,” she adds. “The benefit of our female customers is they're a lot more open to newness compared to males, so that’s why we not only buy specifically to cater to consumers' demands, but also to try to help our consumers see the latest trends.”
Vip.com also stands by the authenticity of its merchandise, a factor that luxury brands deem crucial when launching online shops in China. Wang says merchandise has to go through a nine-step quality control process before it’s sold to customers.
As fashion labels find new ways to appeal to the digital savvy millennial consumer in their own markets, China’s major e-commerce hubs are staking out more partnerships overseas to make it easier for these brands to reach its own group of post-’80s and post-’90s Chinese shoppers who are armed with higher spending power. JD.com, for example, is working steadily on making inroads to the US and has been expanding its presence in Europe, while Tmall recently hosted its Tmall China Day at New York Fashion Week.
Vip.com, meanwhile, took its sights on the UK a step further with an official sponsorship of London Fashion Week, becoming the first Chinese retailer to do so. Vip.com already has an office in London, and operates in 10 countries in total, with 18 warehouses that hold international merchandise.
Vip.com’s London Fashion Week sponsorship was part of a partnership with the British Fashion Council and culminated into a show featuring the spring-summer 2019 collections of four Chinese designers, Hangzhou-based Mukzin, A Life on the Left, Bailuyu, and Kisscat. Before the show, Vip.com showcased fashion films on the designers and live-streamed the multibrand presentation on its Tencent Fashion account.
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“For us, China is an incredibly important market,” says Caroline Rush, chief executive of the British Fashion Council. “We have a lot of shared interests in educating the young Chinese consumer about creative designers, and there is no better place than London, and London Fashion Week to talk about that. We’re a global fashion capital, therefore it makes sense for it to be a showcase of great Chinese talent.
“China’s younger generation is better educated in Western culture, lifestyle and fashion,” says Rush, adding that Korean brands are also extremely popular. “We know our consumers are crazy about fashion trends overseas.”