What Will Be The Fate Of China's Luxury Electric Business To The Crossroads?

Luxury goods, the latest battlefield of China's electricity supplier, will win. This is a contest between luxury goods providers, as well as a game of "fashion" goods and luxury goods.

On the one hand, there seems to be a kind of irreconcilability between the luxury goods and the electricity supplier's genes, and in the early years, the former is even more "dismissive" for the Chinese electricity suppliers. On the other hand, the luxury electronics business includes not only vertical players, but also comprehensive e-commerce giants.

As a result, the Chinese luxury goods vertical electric providers that appeared in 2008 and now are mostly "dead". Lucky people such as vip.com have a transformation sale mode. Nowadays, they often live in the top five of the electricity supplier, and the unfortunate ones are uncountable.

Reporters learned that, as Ali and Jingdong were listed on the US stock market in 2014, and China's luxury market has great potential, foreign luxury goods came in a rush, and then "touches the net", forming alliances with ALI and Jingdong respectively. The confrontation between the two major groups of troops was formed. Besides, international players also participated in domestic competition in different ways.

In July 30th this year, 9 years of luxury electric business was established. It's not just the Shang pin network, but the domestic luxury electric business has been around for about ten years. Most of them are "Oblivion" except for one or two of them.

Against this background, what kind of fate will the "temple banks" survive from the shuffle tide? Is it a crossroad or a cross street in front of us?

In fact, under the new retail trend, online and offline convergence has become a consensus. For luxury electric providers, the industry has the view that the market needs to be constantly stimulated and persuaded by new stories. In this regard, the vertical electricity supplier has a clearer brand cognition than the Dachang's brand tonality is relatively vague, in fact, it has the opportunity to make some bold attempts.

　　 Electricity providers and luxury goods are born "wrong"?

According to the rough statistics of reporters, in addition to Huha network and respecting cool network, vip.com, temple library, Fifth Avenue, charming charm, treasures network, excellent public network, walking show network, respecting network and Shang pin net were established in 2008 ~2010. In 2012, the luxury Racecourse was full of sadness. From January, the products gathered, the library and the Sina luxury goods were shut down, and the Hohhot network, which was founded in 2006, ended in a bleak fashion in December 2011.

The few surviving players also face different fortunes. In May 2014, the respected network, which had been awarded the Sai Fu Asian Fund for tens of millions of dollars, was declared bankrupt. The event was even seen as a watershed in the development of luxury electric business. In July 2015, Ali invested more than $100 billion in strategic investment and held more than half of the shares.

Bai Lian, founder and CEO Zhuang Shuai, worked in the show in early years. He told reporters that in 2014, before the Jingdong and Ali landed in the US stock market, China's electricity providers had no influence in the world, so the cost of persuading the brands was very high. Therefore, "the show took the road of smuggling". At the same time, "other businesses are also somewhat gray areas, and even fake products."

Zhang Yakun, an e-commerce analyst at dolphin think tank, said that most of the platforms could not get the authorization of the branding, and the source of the problem was very serious. The source problem derived from it was the biggest pain point in the industry.

In the end, the luxury electric business is gradually withering, which is related to the particularity of the supply chain. In the era of globalization, luxury goods are one of the few goods that are fully controlled by foreign brands.

As Ding Liguo, a senior retail expert, said, "it's like protecting your own eyes." In his view, luxury goods have the need to maintain their own scarcity, so the scale is not the first place in their pursuit of the sequence. Using the domestic electricity supplier's thinking to deal with luxury goods, it has gone astray in itself. Electricity suppliers often collect traffic through "burning money", attract merchants to enter through traffic, and reduce purchasing prices through huge purchase orders, so as to gain profits. However, because of the strong position of luxury brands, even if the electronic business platform can "call the wind and rain" on other categories, the luxury goods will still be "no way". Secondly, the electricity supplier gene is presented as a continuous pursuit of scale characteristics, which conflicts with the characteristics of luxury scarcity. Once again, the traditional luxury brands often emphasize that there are more emotional face-to-face communication with users from the perspective of value and culture, while the current electricity suppliers are unable to create a sense of presence through graphic, video and other forms.

Placed in the Chinese market, the early luxury electric providers, because of their short supply chain and barbaric growth stage, are full of luxury goods, which are more likely to be avoided by brands.

"The supplier itself is strong, facing south, plus some electricity providers have original sin, business is very difficult to do." Ding Liguo is to evaluate the development of domestic luxury electric business. Not only that, luxury is an imported product after all, but Chinese consumers are far less capable of solving it than Europe and America. "Who can count 10 luxury brands?" Zhuang Shuai said, one of the performance is consumer cognition, often stay in the bag, shoes, belt level, and these are "very mature category, profit is very thin", at the same time, because most consumers only know luxury five brands, and these brands have no profit margin, even appear "pour money to get goods" phenomenon.

If a comprehensive electricity supplier meets luxury goods, it will be more difficult. Zhuang Shuai explained that on the one hand, in the form of presentation, "the price of 20 thousand and 2000 bags together, originally does not meet the positioning and habits of luxury goods." On the other hand, the luxury brand is always doubtful whether the comprehensive electricity supplier matching can be applied to the field.

Therefore, even Amazon, who has swept everything and has the "originator" of the electricity supplier, can not directly start the business of luxury goods. After all, luxury is essentially a conspicuous consumption, and there is always a deep "separation" between the price and the place of display, and between the common people and the consumer goods.

It seems that China's electricity supplier and Western luxury goods are born "wrong", but between the two tensions, luxury vertical business is still growing, and temple library is one example.

　　 Collisions and attempts will continue for a period.

In September 2017, the temple library landed on NASDAQ and became "the first Chinese luxury electricity supplier". That year, temple library was 8 years old. However, on the first day of listing, the stock price of Temple store fell 23%, and the overall stock price was down in August 2018 when the stock price reached a high of 15.48 US dollars per share.

Zhang Yakun told reporters that in addition to the objective conditions such as the stock index environment, IPO timing and China's stock market "mainland refuses to accept", a series of operations that the temple library is expanding today may also make the US stock market lose its focus. At the same time, the US stock market is generally not very optimistic about the marketing driven enterprises. In contrast, the same type of Farfetch and the RealReal are still in a state of loss, but their market capitalization and share price are all higher than the temple library due to their technology driven. However, the monastery itself has many value points, and stock price and market value are not the only criteria for judging its good or bad.

In the global luxury goods business camp, the temple library was "the last one". In January 2018, the luxury electric giant Yoox Net-a-porter Group SpA (hereinafter referred to as YNAP) accepted the invitation of the Swiss luxury goods company, the peak group, and took the initiative to withdraw from the market, and completed privatization in May of that year.

3 months later, the British luxury electric business Farfetch landed at the New York Stock Exchange. It was in the US stock market and the Temple store in Shuangfeng. However, YNAP still has to rely on big trees.

Although each of them is in the corner of the world, the fate of the three libraries of temple library, Farfetch and YNAP is entangled by the "agent war" launched by China's Internet giants. When the temple library was listed, there was neither industrial capital nor BATJ. But all this changed in July 2018. On the 9 th of the month, the monastery announced a strategic cooperation with Jingdong and LVMH group's private equity fund L Catterton Asia to get $175 million of convertible bond investment.

In fact, Jingdong has long extended itself to the field of luxury: in June 2017, Jingdong became the largest shareholder with Farfetch shares of $397 million. Through Farfetch, Jingdong got many brands of Kai Yun group and Burberry group. In October of the same year, Toplife was launched on luxury business and became an important part of Jingdong fashion. In the case of Alibaba, Tmall won the group and set up a joint venture with YNAP in October 2018. At the same time, more than two months before the launch of Toplife, Tmall also launched Luxury Pavilion.

As a result, the confrontation between the two luxury camps between Jingdong and Tmall has taken shape. Behind the rivalry of "Cats" and "dogs" is the touch net of luxury brands. In a report, Bain pointed out that luxury online sales increased 22% in 2018 and sales reached 27 billion euros. The Asian market has risen rapidly, surpassing Europe and becoming the engine of global luxury business.

The preference of China's new consumers to online channels determines that the luxury goods entering China need to consider the channel of e-commerce. Among them, Ali and Jingdong occupy head traffic. Moreover, with the Chinese government lowering import tariffs and strengthening the control of the gray market, it also brings positive benefits to the major luxury brands. Therefore, stationing in China and testing the water electricity supplier has become the proper meaning in its title.

The integrated platform also gradually recognized the particularity of luxury goods and launched targeted services. Such as Jingdong's "Jing Zun Da" distribution service has its own characteristics, and Tmall's Luxury Pavilion also has a threshold. Only a certain standard of consumers can access, "distance sense".

A fashion industry told reporters that the channel of e-commerce is an inevitable choice for luxury goods, but the characteristics of luxury goods decide that it must be the last category of the net. This collision and trial will continue for a period.

Is transformation a road or a chance?

The giant's sword and smoke filled the cold shoulder of the vertical electricity supplier.

But this is not the case.

Zhuang Shuai observed that in China, the real potential of luxury goods is "luxury small white" - this group just started buying luxury goods, which is more sensitive to price, and low quality products are their demands. Starting from cheap authentic products, "Xiao Bai" will gradually experience the quality of luxury goods and "enter the pit". "The benign development of temple library is that it is more and more able to capture the luxury of Xiao Bai's heart."

According to the recent white paper published by the temple library on the 2018 online luxury crowd digital marketing trend, in 2018, nearly 60% of the luxury consumption crowd on the temple library line was below 30 years old.

In a random interview with reporters, the users of temple library are mostly female college students or women who have just left school.

This year's 20 year old Shanghai girl, a light (a pseudonym), was contacted at the end of last year. She basically bought cosmetics, skin care products, and occasionally bought shoes. Almost the same time, the 24 year old Guangxi girl Xiao Tian (alias), who came into contact with temple library, bought himself the first bag in life recently.

"Luxury consumption has no historical precipitation in China" and "can not be educated". Therefore, "we can only start from light luxury and slowly upgrade." Zhuang Shuai said.

However, because of this, "luxury white" will become the core user group for the competition between the comprehensive platform and the vertical platform. After all, mature luxury users tend to buy products from offline or overseas.

In view of the luxury electric business, the fashion industry insiders pointed out that the market needs to be constantly stimulated and persuaded by new stories. In this regard, the vertical electricity supplier has a clearer brand cognition than the big factory's brand tonality is relatively vague, in fact, it has the opportunity to make some bold attempts.

Take Temple library as an example. Since the launch of All in's life strategy, temple library has vigorously promoted diversified businesses such as finance, art and international stations. Some people in the industry regard it as a "loss of focus" of the temple library. There are also views that the temple library is based on the "target population" and builds a fine lifestyle platform.

Li Chengdong, an e-commerce analyst, told reporters that for the temple library, there is an opportunity for severe vertical. And Ding Liguo said that the domestic luxury electric business "to survive, only linked with the line".

In fact, under the new retail trend, online and offline convergence has become a consensus. For example, Li Rujia, general manager of the CRE user relations enhancement Department of the temple library group, responded exclusively to the reporters. Under the online layout, the temple library has launched a new strategy of "5 + 2 + 1", which is specifically divided into five main directions, such as art, food and so on, and social scenes under the two lines.

On the other hand, China's luxury goods vertical electricity supplier has been in the process of more than ten years. With the "luxury of south facing" luxury brands to embrace the Chinese market, and the "touch net", the giant defensive "dark warfare" upgrading, changing thinking, the international "gamers" come in and out, between the advance and retreat, luxury electric providers seem to usher in a new war.

"At present, there is no situation of a leader, and the extension of the market is also constantly exploring and upgrading. From competition channels, logistics and other hardware to services, the competition pattern needs to be maintained for a long time." The industry insiders said.

Against this background, the transformation of luxury electric business in China is destined to lead astray, or the crossroads of opportunity remain, only to wait for time to tell, and the answer to the future has long been buried in the present.