Luxury e-commerce has become more and more “not extravagant.”
If it is not a business announcement, perhaps many people have a hard time remembering Shangpin.com.
On July 30th, luxury e-commerce Shangpin.com posted an announcement on the APP homepage, saying that it will bid farewell to users for a period of time, and the official website and APP will be closed. The reason for the suspension of business is that the financing restructuring is not smooth, the operation is blocked, and the service cannot be provided.
Public information shows that Shangpin.com’s latest round of financing stayed in 2016 and sold to Hemei Group in January 2018. Hemei has purchased 90% of the actual operating company of Shangpin.com and the brand management consulting and commodities established by Shangshi.com CEO Zhao Shicheng with a total amount of equity transfer of no more than 250 million yuan and an increase of 150 million yuan. 100% equity of the sales company.
This old-fashioned luxury e-commerce company, which has been established for more than 9 years and has stood on the cusp of the public, has come into public view by mass layoffs, wage arrears and low-cost sales.
In fact, not only Shangpin.com, the domestic luxury e-commerce business is not very optimistic. Like Shangpin.com, it has become history, as well as exclusive network, product gathering network and Jiapin.com.
The giants entered, luxury e-commerce was squeezed
Another epitome of Chinese luxury e-commerce is the temple library.
On January 22, 2018, Cartier’s parent company, Richemont Group, paid a total of 2.8 billion euros to acquire the remaining shares of Youx Net-a-Porter (YNAP), an Italian luxury fashion e-commerce group. After the transaction is completed, YNAP is delisted from the Milan Stock Exchange. So far, in the global open capital market, Temple Library has become the only luxury e-commerce stock.
But the temple library is getting smaller and smaller.
On September 22, 2017, Temple Library landed on Nasdaq for $13. The market value of the first day of listing was about 667 million US dollars. The stock went down with a decline of 23.08% on the day, and finally closed at 10 dollars. Then it entered a state of continuous decline. In August 2018, the temple library reached $15.48 per share, about 800 million market high; but today, the stock price has been lost to earnings per share < /span>$7.5, with a market capitalization of only $377 million.
In the past two years, the temple library has become more and more out of the unicorn track.
The reason for congenitality is that the luxury goods industry lacks large flows, while vertical means smaller markets. The contradiction that is difficult to solve is that the luxury goods stationed in the e-commerce platform is self-operated by the brand, and the brand side has the full authority to decide the design layout of the flagship store, and the platform has difficulty in bargaining , thus There is no big advantage in terms of price; if the platform purchases itself, it can not completely avoid the occurrence of counterfeit goods in the process of goods circulation, the source of procurement is relatively insufficiently transparent, and there is trust interference between users and platforms.
The more difficult problem is that the online luxury business is being eaten by e-commerce players without luxury genes. These players include Tmall, Jingdong, and even WeChat.
After the listing of the temple library, the Chinese luxury goods market welcomed two new arrivals from Alibaba and Jingdong. Jingdong has invested in Farfetch and wholly developed the luxury service platform TOPLIFE. Alibaba has launched the Luxury Pavilion of the Tmall luxury channel, and began to conduct precision marketing on luxury goods.
The Chief Growth Officer (CGO) of the Temple Library has said that he is not worried about e-commerce giants entering the luxury goods field, mass e-commerce and luxury E-commerce is a completely different style of play, The brand is easy to make from top to bottom, and it is very difficult to promote high-end luxury brands.
But this day is still here. The Chinese market has broad prospects, and the giants are not planning to stop.
Tmall and Jingdong continue to strengthen their own competitive barriers and invite brand parties to enter the platform. Alibaba and Yanfeng Group’s luxury e-commerce company YNAP set up a joint venture company, YNAP brand entered the Tmall Luxury Pavilion; JD.com merged Toplife business into Farfetch, became the largest shareholder of Farfetch, and even opened the first luxury line store , compete with the temple library for the luxury aftermarket cake.
China’s high-end lifestyle research institute, Guest Research Institute, “2019 China Luxury E-commerce Report” mentioned that the top of the luxury e-commerce App shopping experience list is Jingdong, Farfetch, Tmall are second and third, and the temple library is only ranked fourth place. It is estimated that in 2019, the official market capacity of China’s luxury goods online will have a chance to exceed 50 billion yuan, and the total market size will exceed 200 billion yuan.
According to the normal logic, even if the integrated e-commerce has the largest traffic volume of online transactions, its lower customer price is difficult to convert users into luxury consumption; luxury goods also hate mixed with mass consumer goods. Together, reduce brand tonality.
But another logic is that, as the integrated e-commerce platform does notBreaking the anti-counterfeiting action and optimizing the supply chain, Jingdong and Tmall, which have a larger volume, can provide certain brand endorsements for luxury goods sales, plus labels such as brand-owned and official flagship stores, and deliberately separated from the hypermarket area. Independent channels make integrated e-commerce more competitive than vertical luxury e-commerce.
As for WeChat, there are data display, Among the 107 luxury brands entering China, 92% have opened official service numbers and subscription numbers. LV, Herms, Cartier, and Tiffany released pocket bags, jewelry and other core products on WeChat in a boutique limited-time store to test market demand; Vacheron Constantin’s hundreds of thousands of Chinese-qualified watches also chose to start on WeChat, which are more than luxury goods. The e-commerce game is more gimmick.
Shangpin.com may have seen the threat of integrated e-commerce earlier than the temple library. As early as 2015, Shangpin.com put a full-page newspaper advertisement in the “News Morning News”, “even if the market size is the first, but my price is lower than you; even if the delivery speed is the first, but my price is lower than you. Even if the price is really low, but the brand is low to no match, the advertising words are called Tmall and Jingdong, claiming to break the industry bottom line with the lowest price of the whole network. But in the later competition, Shangpin.com failed to escape the fate of being eliminated by the market because of the internal debt drag, the lack of innovation in the model, and the squeeze by e-commerce giants.
The luxury e-commerce has been overwhelmed by the giants.
To find a way out, you must sharpen the edges and corners
Luxury e-commerce is beginning to become more and more “not extravagant.” The most intuitive feeling comes from the unremitting sinking plan of the survivor temple library.
Although the comprehensive e-commerce has not been included in the competition, the champion has long realized that the growth rate of luxury goods online is limited, and it has been incorporated into the power of the Internet giant. The traffic is almost in the hands of BAT. The principle of 28 is very clear (the most important is only about 20%, and the remaining 80%, although it is a majority, is secondary).
The temple library CEO Li Rixue has always been disgusted with the outside world to define the temple library as “luxury e-commerce”. After many years of exploration, the temple library has formed a number of business segments, such as temple library life, temple library, temple library art, temple library agriculture, temple library finance, etc. The concept of a boutique life service platform. ButProduct sales are always the revenue pillar of the temple library. This means,In the eyes of investors, GMV, SKU, logistics, and payment are still temples. Important metrics.
The temple library has to expand its boundaries in the e-commerce business. Social e-commerce has made Temple Library see opportunities. In June 2018, the temple library launched a new business warehouse store, which became a platform-based enterprise that entered the social e-commerce field. Different from the temple store that deals with luxury goods, the store sales category is based on food fresher, department store, beauty and skin care, which is lower in customer price. 1/3. Luxury shopping has also become one of the store’s plans, although it only accounts for 5% of the overall category.
This business directly pushes the temple library from the high-end crowd to the public and becomes more grounded. The main library of Temple Library also gradually expands the beauty, home, home appliances, wine and other categories. The current temple library can not only buy 20,000 yuan Gucci bags, but also can buy 20 yuan hot pot bottom material. As of December 2018, the store owner reached 100,000, and the platform GMV exceeded 100 million yuan. We must know that in the first quarter of this year’s financial report, the active users of Temple Library only had 305,000 and the revenue was 1.175 billion yuan.
The store seems to be groping in an orderly manner, but from “high-cold luxury” to “social popularization” Will it beErosion temple brand effect, let high-end Consumers have psychological biases and it is difficult to draw definitive conclusions. Luxury brands have begun to embrace e-commerce by falling prices, but they still have higher control over the platform.
Another visible trend is that the second-hand luxury track is getting hotter. Only two, red cloth, heart is e-commerce players, Jingdong, Temple Library also have involved in this field. The observation report shows that China’s second-hand luxury goods market accounts for 2% of the luxury industry market, and its development potential is huge. The market size in 2019 was 15.1 billion yuan. It is expected to double to 25.7 billion yuan by 2024.
They are leaving, but they are actually an “anti-luxury” road.
As a luxury e-commerce, second-hand luxury goods are somewhat averse to the new high-cold, high-priced traits.Moreover, their goal is to reduce the luxury attitude, become more affordable, and help high-end crowds to clean up the use of low-frequency luxury. A Dior handbag of 10,000 yuan can be won on the second-hand luxury platform for 3,000 yuan. In contrast, such as Burberry, Liufeng, etc. luxury goods companies, preferring Burning out excess luxury is not willing to cut prices or charitable donations.
Maybe, luxury e-commerce companies must survive under the influence of multiple parties, only have to sharpen the edges and corners, lower the body, and then to the full category platform.