Xiu.com screenshot | Source: Xiu.com

We continue this week’s focus on e-commerce by turning our attention on how to succeed in the rapidly expanding e-commerce market in China. 

BEIJING, China — According to a recent report by The Boston Consulting Group (BCG), China is set to become the world’s next e-commerce superpower, surpassing the United States to become the largest online commerce market in the world, with an estimated market size of $300 billion. In 2006, less than 10 percent of China’s urban population shopped online. By 2015, that figure is expected to have quadrupled, reaching 44 percent, while the total number of e-commerce shoppers in China will grow to 329 million.

What’s more, according to BCG, China’s massive geography, a middle class that is rapidly expanding beyond the country’s largest cities, and widely accessible, heavily subsidised high-speed internet — broadband in China costs just $10 per month, compared with $30 per month in India — make the country unusually fertile ground for e-commerce, with internet access far outpacing the reach of physical retailers. Indeed, up to a quarter of e-commerce demand in China is for products consumers cannot find in physical stores, with apparel and skincare amongst the fastest-growing online categories.

But for fashion companies aiming to crack the online retail opportunity in China, it’s imperative to understand that the country’s e-commerce market is very different to established markets in the United States and Europe and that online shoppers in China — much younger, on average, than their Western counterparts — have different expectations, preferences and patterns of behaviour.

… Continue Reading

Taobao | Source: Jing Daily

Online shopping is growing rapidly in China (BBC News)
“Across China, online companies large and small are learning how to be effective e-commerce players – or fail like US goliath eBay, which was trounced by upstart Taobao back in 2006. In 2010, China’s online shopping industry had a turnover of $80bn, and grew 87% year-on-year. China’s 420 million internet users spend around a billion hours each day online – and last year, 185 million made at least one online purchase.”

Ferragamo shows resilience of luxury sector (Reuters)
“Up-market Italian shoemaker Salvatore Ferragamo posted first-half profits up by a third on Monday, adding to evidence that the luxury industry remains vigorous through the global financial turmoil… The Florence-based family firm, which is less profitable than its peers, said first-half core earnings before interest, tax, depreciation and amortisation rose 59 percent to 83.8 million euros, with a margin on sales of 18.2 percent from 14.9 percent a year before.”

Combining Sports, Music and Fashion Raises Buzz for Sneaker Companies (Forbes)
“Buzz scores—which measure recent consumer perception—have been rising among 18-49 year-olds since early August for sneaker giants Adidas and Nike, corresponding to the companies’ recent advertising endeavors that combine together sports, music and fashion.”

Snapette Aims at Women Shoppers (All Things Digital)
“The majority of e-commerce sites share a single thing in common: They were built by dudes. That hasn’t escaped the founders of Snapette, a social photo-sharing app built by women, explicitly for women… The app, which launched in Apple’s App Store a few weeks back, focuses on the experience of shopping and leaves out buying altogether — for now.”

Lulu Kennedy: fashion’s fairy godmother (Telegraph)
“Kennedy is a fashion talent-spotter, founder of the venture Fashion East, which plucks emerging designers out of obscurity and gives them the chance to showcase collections to the style cognoscenti during London Fashion Week… Since 2000, star designers including Ilincic, Saunders, Richard Nicoll, Henry Holland of House of Holland and the Pringle designer Alistair Carr have all had their careers kick-started after being singled out by Kennedy’s gimlet eye.”

Savigny Luxury Index June 2011 | Source: Savigny Partners

LONDON, United Kingdom — The M&A and IPO scene in luxury goods and fashion continues to storm ahead. This month’s Market Pulse reveals a redefined Savigny Luxury Index which now includes Italian fashion powerhouses Prada, and soon, Salvatore Ferragamo.

Big news

• Two very high-profile IPOs: Prada listed in Hong Kong on 24 June and Salvatore Ferragamo listed in Milan on 29 June.  Both pulled off their IPOs amongst tricky conditions with high levels of IPO pullouts since the beginning of the year both in Asia and in Europe

• Stripping out Prada, which caused an artificial jump in the SLI, the SLI decreased by 2 percent; still outperforming the MSCI which decreased by 3.2 percent.  Despite concerns over rising interest rates in China, the luxury sector (along with internet stocks) has been seen as a safe haven for investors as the global economic outlook is marred by a looming debt crisis in the USA and in certain European countries

• Continued strong M&A activity: Kurt Geiger, Moncler and Uriage were all snapped up during the month

… Continue Reading

Louis Vuitton's Young Arts Project, REcreative | Source: REcreative

Calling all aspiring artists: Louis Vuitton launches just the site for you (Telegraph)
“REcreative, www.recreativeuk.com, has been devised and developed over the past year… Aspiring artists can upload their work and share it with the online community in the ‘Projects’ section of the site, where leading artists and critics will select their favourite works to highlight.”

Labelux boosts fashion M&A (M&A)
“Mergers and acquisitions activity in the fashion sector maintained its surge with the purchase of English outerwear company Belstaff by Swiss luxury goods business Labelux. The undisclosed deal follows on from the recent retail acquisition surge, with the purhcases of Kurt Geiger, Moncler and Labelux’s own purchase of Jimmy Choo.”

Ferragamo gets go-ahead for Milan IPO (Reuters)
“Salvatore Ferragamo said on Thursday it had received clearance from market regulator Consob for what could be the first initial public offering in Milan this year. The Tuscan family-run maker of fine leather shoes, valued by analysts at around 1.5 billion euros.”

J. Crew reports 1Q loss on clearance pricing (MSNBC)
“Preppy clothing seller J. Crew Group Inc. said Thursday it swung to a loss in the first quarter as it marked down clothes to clear out excess inventory and took charges related to being acquired. The company, which went private in March… said net loss totaled $29.9 million.”

British fashion world pays tribute to the Telegraph’s Hilary Alexander (Telegraph)
“Last night at London’s St. Pancras Renaissance Hotel, the great and the good – and the drop dead fabulous – of the British Fashion industry gathered to pay tribute to the Daily Telegraph fashion director, Hilary Alexander’s remarkable career.”

Art of the Trench | Source: Burberry

Burberry Looks Online for Ways to Gain Customers (IHT)
“Angela Ahrendts still remembers when she bought her first Burberry trench coat… Ms. Ahrendts — who now runs the company — is hoping to move the quintessentially British brand into the age of the Internet to attract a new generation of shoppers.”

Luxury Pundits: Stay Elitist Yet Youthful (Media Post)
“Luxury brands… must be elitist, empathetic, immediate, social and youthful in order to succeed… the single worst thing that happened to luxury was its democratization.”

La Perla to rationalise brand strategy (Drapers)
“Italian lingerie firm La Perla is to rationalise its brand portfolio and lower prices in a move it claims will boost its market share.”

Bond Street rings up record for shop rents (Times Online)
“Shop rents on London’s Bond Street, home to the world’s glitziest brands, are poised to defy the credit crunch and smash through £900 per square foot — a record in Britain.”

Online museum for fashion house Ferragamo (Reuters)
“Italian fashion house Salvatore Ferragamo has taken a museum detailing its history and culture online, allowing young designers to add their creative touch to its shoe models.”