Personalised shopping service

In China, designer goods are delivered to your doorstep, with the delivery man decked out in a suit, tie and white gloves, writes Amy Qin

IN China, legions of delivery personnel power the world’s largest e-commerce boom. Known for their careening threewheeled carts, they terrorise pedestrians and sometimes dump their packages on doorsteps and desks with the delicacy of a restaurant employee tossing out yesterday’s leftovers.

Then there is Tang Hongliang, who is part of an ambitious effort to bring some sparkle to the business — and perhaps help revive the fortunes of the world’s makers of high-priced handbags and watches.

Decked out in a black suit, dark grey tie and white gloves, Tang does not look like a typical Chinese package courier.

Instead of piping hot noodle lunches, he delivers a US$2,400 (RM10,140) designer handbag. Rather than a three-wheeler, he drives an electric car to transport expensive cargo. In the time he makes one or two deliveries, the typical Chinese courier would have made about 150.

“Efficiency is of course important,” said Tang, who works for the online retailer JD.com. “But serving the customer is the most important.”

Facing slowing sales, global luxury brands are angling for a piece of China’s e-commerce market, where people are accustomed to buying gadgets and groceries, but not high-priced jewellery and haute couture.

Many are unsure, however, about diving headfirst into online retail because China’s favourite way to shop is also an industry better known for piracy and dusty deliverymen than for shine and polish.

To court the luxury market, companies A Prada bag, shipped via JD.com’s luxury delivery service in Beijing. The JD.com luxury service’s electric car travels the streets of Beijing. To court the luxury market, companies like JD.com are using their customer base to offer upscale retailers support on things like white glove deliveries.

like Alibaba and JD.com are using their vast customer base to offer upscale retailers support on issues like digital marketing, pricing, customer services and, in the case of Tang, delivery.

“The most difficult thing to overcome is the experience for the shoppers,” said Xia Ding, president of JD.com’s fashion division.

“But because we own the logistics, we are really able to deliver luxury goods in a way that makes shoppers feel like they are getting the same special experience as they get offline.”

DOMINAtING tHe MARKet

Chinese shoppers have long dominated the global luxury market. In the last two years, a continuing anti-corruption campaign and an economic slowdown led to a decline in Tang Hongliang, a driver for the JD.com luxury service, delivers a package to Yan Luxia in Beijing.

Chinese demand for luxury, contributing to an overall global slump.

Still, last year Chinese shoppers accounted for 30 per cent of global luxury purchases, according to a report by Bain & Co.

Until recently, however, many Chinese luxury purchases were being made overseas or through daigou — personal shoppers who buy goods abroad and bring them into China, avoiding the country’s hefty taxes.

That started to change two years ago when, in an effort to combat grey-market sales, a number of high-end luxury brands led by Chanel took steps to reduce the price gap between goods in China and overseas.

At about the same time, the Chinese government also stepped up efforts to crack down on daigou shoppers, increasing checks at airports and lowering duties on some luxury goods imported through official channels.

As a result, brands have seen a shift in luxury shopping habits, with more and more Chinese consumers now choosing to buy at home rather than abroad.

This so-called reshoring has caught the attention of Chinese e-commerce companies, causing major players like Alibaba and JD.com, as well as smaller luxury-focused companies like Secoo and Xiu, to invest aggressively in the luxury sphere.

“Mass market brands already know that there is no choice but to be on these e-commerce platforms,” said Liz Flora of L2, a market research company based in New York. “So luxury is really the next frontier for these e-tailers. You can see the competition getting more and more fierce.”

In addition to starting the white-glove delivery service, JD.com announced a deal in June to invest US$397 million in the luxury e-commerce platform Farfetch, which is based in London.

Both Alibaba and JD.com are consider-

ing rolling out separate platforms focused exclusively on luxury in the coming months, executives from the companies said in interviews.

But so far, China’s e-commerce companies have struggled to persuade top international luxury brands to sell on their platforms.

Luxury companies have long been concerned that with e-commerce, it would be impossible to replicate the gilded, perfectly curated in-store shopping experience.

Brands also worry about their products being sold next to counterfeit and greymarket items — an issue that Alibaba in particular has struggled with in the past.

ADD-ONS

Ultimately, e-commerce giants like Alibaba and JD.com are hoping that the allure of their vast consumer base will be too difficult for luxury brands to resist. Shiny add-on features like the white-glove delivery service may make swallowing the e-commerce pill a little easier for the brands.

On a recent morning, Tang, the courier, pulled out of a JD.com warehouse on the outskirts of Beijing with a single delivery box in tow. Three-wheeled delivery carts whizzed past as he drove calmly toward the city’s central business district.

After waiting for the customer for nearly two hours, Tang stepped out of the car, pulled on his signature gloves and headed out to deliver the package.

“Wow, I wasn’t expecting this service at all,” Yan Luxia, 30, said as she received the box and took out a designer Italian leather handbag.

Yan, who manages a dating service in Beijing, later said the premium delivery service had been a very “satisfying” experience.

“But to be honest,” she added, “consumers care more about the authenticity of the product.