Did you know that China now has the largest online shopper population in the world? In 2012, 242 million Chinese consumers purchased goods online, spending roughly $209 billion on e-commerce. Add to that the fact that China became the world’s largest consumer market for luxury goods in 2012, and it seems evident that the potential for luxury e-commerce in China is extraordinary.
As China is set to become the largest e-commerce market based on market share in 2013, everyone in the country is poised to take online shopping to the next level. The Chinese government considers e-commerce crucial to its economy, continuously supporting and developing improvements to the system.
What’s proving most exciting for the e-luxury world is that these consumers are not stopping their online sprees at shoes, handbags, and clothing; they are demonstrating a willingness to purchase “big ticket” items online. For example, on February 20, 2012, JD.com had an online sale of 300 limited edition Smart cars. All 300 sold out within 89 minutes, at the rate of one car every 20 seconds. As wildly successful sales like this become more commonplace, the potential is unprecedented.
Furthermore, while popular Western luxury brands have demonstrated great success in large cities such as Shanghai and Beijing, there are countless lower-tier cities throughout the vast expanse of China where consumers want these same brands, but can’t get them. Time, space, and money limit the amount of luxury store openings, and the fact that the price of luxury goods in China is one third higher than in the U.S. and Europe means that consumers who want luxury can’t reach it, or won’t pay for it there.
As the demand is there, and the consumers patiently wait with their wallets open, now is the time for luxury brands to leap into China’s online marketplace. So what are some of the key ways to reach these consumers successfully?
• Offer brands and products that are relevant to what the different consumer segments want and need
• Offer them at the most competitive price
• Guarantee authenticity—50% of Chinese consumers worry over this issue
• Provide tailored, responsive customer service
• Provide convenient and safe payment methods and timely delivery
• Design a website specifically for Chinese consumers—not one that has been translated from English
• Engage customers through mobile devices and Chinese social media platforms
As consumers are ready, willing, and able shop online, and many of them are seeking luxury, it will be an interesting and exciting race to the top.