Luxury shopping websites offer China a cheaper alternative
Tuesday 14 June 2011
You don't have to tell the people at Prada how valuable the Chinese market for luxury goods has become - the Italian fashion icon is so keen to set up a base out East that it is about to be listed on the Hong Kong stock exchange.
In fact, such has been the rush by the world's luxury brands to get a foothold in China that there are, apparently, little to no spaces left for them in the malls of the country's largest cities.
Bad news for the brands themselves - keen to get a slice of a market estimated to be now worth 84 billion yuan (nine billion euros) a year - but it is good news for China's fast-growing number of online luxury-only shopping portals.
These canny operators have found a way to keep their nation's brand-hungry consumers satisfied - and it involves buying older "out-of-date" items from the luxury brands in Europe and the United States, and then selling them in China at prices way reduced from their original ones.
Hence a Hermes watch with stainless steel case and leather strap - selling for 48,000 yuan (5,000 euros) in shops - will only set your back 28,600 yuan (3,000 euros) online. A Prada leather satchel, meanwhile, will cost you 6,190 yuan (664 euros) online, which comes in at half the price found in mainland Chinese shops.
"Luxury goods are not something for rich people. A receptionist can own a [luxury][ handbag, and it will be easier for her to have one if she shops on our site," Allen Yang Peifeng told the South China Morning Post newspaper.
Yang is the man behind vipstore.com - a site which in just two years has gathered 1.5 million registered users and is currently pulling in around 300 million yuan (32 million euros) per year. His clients are on average between 20 and 40 years old, says Yang, with a fair share of them living in remote areas and away from access to big brand-shops.
Yang's site was modeled on its European equivalent - buyvip.com - and there are now plenty of other online options out there.
"Our customers beg us to introduce luxury items," explained Kathy Zhong Kaixin, president of the online portal vjia.com.
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