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Luxury goods are getting rid of the pure reliance on offline sales channels.

Luo Min, founder of Qudian Group, a company listed on the New York Stock Exchange, has always been known as a startup entrepreneur. When he had a new entrepreneurial direction, the news itself was not surprising at all.

The outside world is paying more attention to the battlefield he chose to settle in this time: luxury e-commerce. Recently, a cross-border luxury e-commerce platform called “Million Miles” is active in the public’s vision, and behind it is Fun Store.

The new player’s slogan is “not far away, global selection”-so that all good things are within sight. When Luo Min gave the platform the name “Million Miles”, he probably wanted to show his ambition based on China and facing the global market.

In fact, luxury goods are getting rid of the pure reliance on offline sales channels.

According to the general estimates in the industry, online sales of luxury goods will experience rapid growth in the next few years, and may reach 70 billion US dollars by 2025. In addition to the traditional players such as Farfetch and Alibaba, Miles announced its entry, which may bring a more diversified and localized approach to this recognized “too difficult” market.

01 Thousands of dollars are thrown away, and the big market is broken

Luo Min is a person who dares to think and do things. This is the consensus of observers in the industry. Sensitive and daring personality is also very obvious in this strong attack on cross-border luxury e-commerce.

According to the traditional marketing analysis framework, luxury is obviously an area with low entry barriers. On the one hand, the decision-making process of consumers is cautious and slow, and it is quite difficult to build a mutual trust relationship with consumers. challenge.

Thus, traditional e-commerce players generally adopt a cautious approach, focusing on slowly cultivating the consumer market over a longer period of time. But Wanli’s eyes are different. From the outset, he has thrown out the “ten billion yuan subsidy” strategy and tried to quickly penetrate the target market through strong subsidies and high fission.

Currently, black card members on Wanlimu platform enjoy 230ml of SK-II fairy water subsidy price of 681 yuan, which is equivalent to 44% compared with the counter price; 30ml of sea blue mystery essence cream subsidy price of 681 yuan, 45% ; 100ml Estee Lauder small brown bottle is only 622 yuan, 45% off … no rhetoric, no formal masterIn a word, Miles simply puts the irresistible price in front of all target consumers.

Price comparison between Tmall flagship store and Miles: SK-II fairy water 230ml

Price comparison between Tmall flagship store and Miles: Mystery essence of sea blue 150ml

Price is the easiest way to distinguish luxury goods from brands. But if similar products can be purchased at a lower price, consumers will naturally not refuse, after all, no one can’t bear the money.

In addition to subsidizing the price of luxury goods to the lowest level of the entire network, the ten billion subsidy strategy also covers the fission mechanism common to social e-commerce.

Wanlimu distinguishes its members and subsidizes them to varying degrees within a limited time. For example, current black card members can get 200 yuan tokens and enjoy 10% discount for life.

In addition, users invite new members to register and place orders, and can get a certain amount of Miles, similar to the “cash back” mechanism, to encourage users to fission and achieve word of mouth within the circle.

Whether it is a tens of billions of subsidies or a mechanism that introduces social fission and issues tokens to consumers, these are atypical ways that have not been seen in the field of luxury e-commerce before. Wanlimu obviously hopes to lower the threshold for luxury goods purchase through subsidies, so that more people become active users of luxury goods e-commerce.

Smashing a big market with tens of billions of subsidies, so is the planning behind Wanlimu.

02 Dongfeng of Miles Purpose

Wanlimu ’s seemingly aggressive strategy is actually “everything is ready”.

The “subsistence” of the high subsidy comes from the strong financial strength of the parent company Fun Store: According to the 2019 financial report of Fun Store, as of the end of 2019, the group had a net asset of 11.924 billion yuan (about 1.685 billion US dollars).

In 2019, the total revenue of Qudian for the whole year was 8.84 billion yuan (about 1.27 billion US dollars), an increase of 14.9% year-on-year, and the adjusted net profit was 3.352 billion yuan (about 4 yuan)US $ 68.9 billion), a year-on-year increase of 31.5%.

Obviously, the company has sufficient financial strength to conduct high subsidies during the market incubation period.

But whether consumers will pay for “low prices” when buying luxury goods, the underlying sticking point may only be concerns about whether the products sold on the platform are genuine. The Wanlimu platform currently adopts the B2C self-operated model, which can not only ensure the official control of the entire process from procurement to logistics, but also means that the platform will take full responsibility for the authenticity of the goods.

Wanliu works with buyer shops and brand suppliers in more than ten countries and forty cities in the world to build their own warehouses at major logistics nodes at home and abroad, and with third-party agencies that provide authenticity authentication. Inspection Group reached strategic cooperation.

Wanlimu’s series of measures are designed to allow users to buy genuine “Dingxin Wan” at low prices.

But after everything is in place, Miles also needs “Dongfeng” to succeed. It seems that the timing of the current entry into luxury e-commerce is just right.

From the perspective of the entire luxury goods e-commerce market, China is becoming a major town in the luxury goods industry. According to monitoring data released by Bain, the growth rate of the Chinese market has increased by 30% in the past year, and 90% of global growth has been driven by Chinese consumers. At the same time, luxury goods sales in the online channel recorded a 22% increase, becoming the fastest-growing sales channel for luxury goods.

For Wanlimu, whether it is the Chinese market or online channels, the super high growth shown by it is undoubtedly a great benefit for its future development.

In addition, the outbreak of New Crown Pneumonia that has swept the world since the beginning of the year has also provided an opportunity for the expansion of luxury e-commerce. Due to the widespread use of prevention and control measures such as shop closures and home isolation offline, offline sales channels for luxury goods are almost shut down, and the severe situation has begun to force the original high-cold luxury brands to review their channel strategies.

Armani, Prada, Cartier, Alexander Wang, Miu Miu, Delvaux and other brands have begun to choose online stores, while the Italian OTB Group, which owns brands such as Marni, Diesel and Maison Margiela, has even more openly adopted online live broadcast Promote sales. McKinsey’s “Luxury Digital Marketing Watch Annual Report” has pointed out that the share of online luxury sales will reach 12% this year, and the epidemic will obviously accelerate the process of electric shock of these brands.

As early as the end of October 2018, Alibaba Group announced the establishment of a joint venture with Richex Group’s largest luxury e-commerce company Yoox Net-a-Porter; the British luxury e-commerce platform Farfetch also cooperated with JD.com. These traditional domestic e-commerce players choose to cooperate with overseas giants, which not only allows domestic e-commerce platforms to quickly borrow the resources and experience of overseas counterparts, but also completes luxury e-commerce earlier.