Retail surgery: How can I crack the Chinese luxury ecommerce market?

Facts and figures are published every day about China’s emerging digital consumers – it’s a market that’s about to exceed US online spending, and so has retailers’ attention. But, despite the size of the market, it can be difficult to find insights into the practical questions around market entry.

Charlie Bodycote, managing director at digital consultancy Bolei Digital, says: “Ecommerce is growing in China.

However, penetration is not uniform.”

Some luxury brands have come late to the ecommerce party, and online adoption for luxury goods is still behind the mainstream. There are several factors cited for poor ecommerce take-up in the luxury sector in China.

Bodycote says: “Imports to China are subject to a ‘luxury tax’, and brand pricing in Asia is often already above pricing in Western markets. Online consumers have complete visibility of global pricing, and are reluctant to spend sometimes 40% more to buy in China.”

Andrew McGregor, chief executive of consultancy eCommera, says: “Customers are very aware that counterfeiting is widespread in China and are reluctant to buy if they cannot be certain of the authenticity of the goods.”

Luxury goods consumers can afford to travel, and by visiting Hong Kong, Macau, London, Paris or New York, they can access guaranteed quality at lower prices. McGregor adds: “The travelling customer, however, presents an opportunity to build a relatively simple web and social media presence, with campaigns focusing on international retail locations. A simple Chinese-language brand website is a smaller investment than a full ecommerce site, yet the analytics are valuable.”