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China's VIPStore Expands Luxury Brand Portfolio

2011-08-31 12:12 1041

BEIJING, August 31, 2011 /PRNewswire-Asia/ -- Global luxury goods providers are turning to the booming Chinese market and have sped up their expansion in the country, as the continued economic downturn in the US and Europe and the recession in Japan have combined to pummel their businesses in those markets since the beginning of the year. Meanwhile, China's domestic players hope to launch more global luxury brands in their home market to ease the increased pressure from this new wave of competitors. VIPStore (www.vipstore.com), the country's largest high-end fashion e-commerce platform, has been establishing eight to ten partnerships with global luxury goods providers monthly, in a move to increase its brand portfolio, while expanding product mix and cementing the retailer's position as one of the leaders in China's luxury goods e-commerce sector.

According to the 2011 World Luxury Association Blue Book survey, as of the end of March 2011, China's total consumption of luxury goods (excluding private jets, yachts and luxury vehicles) had reached US$10.7 billion, accounting for a quarter of global consumption while China has become the world's second largest consumer of luxury goods. In addition, data released by EnfoDesk shows that online transactions for luxury goods in China reached RMB3.45 billion (approx. US$531 million) in the second quarter of this year. The full-year figure is expected to reach RMB16 billion (approx. US$2.5 billion). All statistics point to an inexorable rise in China's appetite for luxury goods.

Despite the rapid growth of China's domestic luxury market, an obvious trend is that of the convergence of luxury goods sold online. Industry analysts noted that goods from the known major global players are usually preferred when new brands from abroad are introduced into the market. In fact, a flood of fashion and designer brands from outside of China, among other items, have joined luxury goods in meeting increasingly diversified customer demand. It becomes more difficult to differentiate a brand from a competitor's through product management after convergence of the brand has taken place. Igniting a price war may be a way to achieve it; however, such an act will inevitably trigger a self-defeating round of cut-throat competition. The current situation is seen as detrimental to the development of the entire sector.

As an industry leader in the diversification of its businesses, VIPstore has aggressively been expanding its top-tier luxury portfolio since its inception while continuously seeking partnerships with more high-end brands. VIPStore CEO Yang Peifeng said, "Second-and third-tier luxury brands that are already established in the European and American markets are of excellent quality despite their lack of name brand recognition, while some of them, including certain designer brands, are, in fact, very high end and can be more expensive than some top-tier ones. The entry of these brands into China will spur the diversification and differentiation of luxury brands while, to some extent, weakening the competition among industry players."

VIPStore has become a direct sales partner for over 500 luxury brands worldwide, including, among others, LV, Dior, Prada, Gucci, Burberry, Estee Lauder and Chloe. Just this month, VIPStore introduced a number of international luxury brands into the Chinese market, including Romeo & Juliet Couture, Pietro Alessandro, EcoSkin, GNC and Eliza & Ethan, furthering the breadth of the company's product portfolio. As an example, through its partnership with GNC, Vipstore.com added high-end healthcare products to its portfolio.

By buying directly from luxury producers, VIPStore can be assured of the quality of goods it sells while avoiding cost increases associated with procurement from intermediaries, ensuring consumers receive high quality, affordable products. The use of limited time sales helps to guarantee shoppers an enjoyable and positive shopping experience. Thanks to these factors, the company has seen continued rises in both membership and sales volume, with its monthly sales now reaching tens of millions of yuan. VIPStore is fast becoming the preferred place to buy luxury products online.

Industry analysts are of the opinion that the Chinese luxury market will continue to maintain strong growth in sales over the next few years and is likely to become the largest luxury market worldwide by 2015. This will undoubtedly provide more opportunities for the rapid growth of VIPStore. The high level of diversification of its businesses has allowed the company to continuously expand its luxury brand portfolio and make additional contributions to the Chinese online shopping market for luxury products.

Source: Vipstore.com
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