LVMH goes on­line to lure more lux­ury cus­tomers to spend

China Daily (Hong Kong) - - BUSINESS - By SHI JING in Shang­hai shi­jing@chi­

Global lux­ury giant LVMH is em­brac­ing the dig­i­tal age in China by pro­vid­ing on­line shop­ping ser­vices for its core brand Louis Vuit­ton.

Start­ing from July 20, con­sumers can shop on Louis Vuit­ton’s of­fi­cial Chi­nese web­site for all the prod­ucts in the lat­est sea­son, in­clud­ing hand­bags, shoes, ready-to-wear cloth­ing, jew­elry, ac­ces­sories and fra­grances. The on­line ser­vice has ini­tially been made avail­able in 12 ma­jor cities in­clud­ing Bei­jing, Shang­hai and Guangzhou.

Not all the prod­ucts can be de­liv­ered, with some re­quir­ing con­sumers to pick them up at stores. There is no price dif­fer­ence be­tween goods of­fered at bricks-and-mor­tar stores and the on­line plat­form. UnionPay and Alibaba Group’s Ali­pay are ac­cepted, while Ten­cent Hold­ings’ WeChat pay­ment is not sup­ported yet.

This is the 11th e-com­merce plat­form that Louis Vuit­ton has rolled out since the first in France in 2005. In­dus­try in­sid­ers said that the on­line chan­nel will off­set the brand’s clo­sure of eight bricks-and- mor­tar stores in sec­ond and third-tier Chi­nese cities since last year.

LVMH Chair­man Bernard Ar­nault said ear­lier that on­line shop­ping ser­vices are “very de­manded by the client”, say­ing that dig­i­tal ca­pa­bil­i­ties are an es­sen­tial com­po­nent of the elite ex­pe­ri­ence of buy­ing lux­ury goods.

With a mar­ket cap­i­tal­iza­tion in ex­cess of 100 bil­lion eu­ros ($117 bil­lion), LVMH has been quite ac­tive with its dig­i­tal­iza­tion. It hired Ian Rogers, a for­mer ex­ec­u­tive at Ap­ple Mu­sic, to be the group’s dig­i­tal of­fi­cer in Septem­ber 2015. The group’s e-com­merce plat­form 24Sevres be­came op­er­a­tional in June.

Chris Mor­ton, chief ex­ec­u­tive of­fi­cer of on­line lux­ury re­tailer Lyst, in which Ar­nault’s fam­ily has also in­vested, said that lux­ury brands will face the risk of be­ing elim­i­nated if they con­tinue to ig­nore con­sumers’ needs and over­look dig­i­tal­iza­tion.

Glob­ally, dig­i­tal sales of lux­ury goods in­creased by al­most 12 per­cent in 2016, out­pac­ing all other re­tail chan­nels, ac­cord­ing to mar­ket re­search firm Euromon­i­tor In­ter­na­tional. Sales of lux­ury prod­ucts are set to in­crease by an ad­di­tional 50 per­cent in real terms over the next five years, ac­count­ing for al­most 10 per­cent of all lux­ury sales.

As the world’s largest e-mar­ket­place, the trans­ac­tion vol­ume of China’s e-com­merce mar­ket rose 25.6 per­cent to to­tal 20.5 tril­lion yuan ($3 tril­lion) in 2016, ac­cord­ing to mar­ket con­sult­ing firm iRe­search.

Just two weeks ahead of Louis Vuit­ton’s move, Gucci started the on­line shop­ping ser­vice on its of­fi­cial web­site in China, and Prada is ex­pected to roll out the same ser­vice in the third quar­ter. Chris­tian Dior started to sell hand­bags on its of­fi­cial WeChat ac­count last Au­gust.

Burberry launched its store on Alibaba’s ma­jor on­line mar­ket­place Tmall three years ago. Ac­cord­ing to the group’s fis­cal re­port for the first quar­ter end­ing June 30, in­come from e-com­merce has in­creased by 40 per­cent yearon-year, and that re­sult in China has more than dou­bled.


A woman walks past a Louis Vuit­ton ad­ver­tise­ment in Fuzhou, cap­i­tal of Fu­jian prov­ince.

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