In “Chinese Whispers,” we share the biggest news stories about the luxury industry in China that have yet to make it into the English language. In this week’s edition, we discuss:
- Luxury handbags sell out at Costco in Shanghai
- Yoox and Alibaba’s joint venture, and
- & Other Stories opens on Tmall
Hermès and Burberry handbags sell out at Costco in Shanghai– Sina Fashion
On August 27, the first Costco in mainland China opened in Shanghai. Viral video online showed that despite opening on a weekday, the store was crowded with people and was forced to close for half the day because of overwhelming foot traffic. It’s worth mentioning since the membership-only, wholesale supermarket also sells luxury handbags. Some of the most expensive ones include a Hermès bag, which was discounted to $14,000 (100,000 yuan), and the high-end spirit Maotai at $210 (1500 yuan, half of the retail price). Both were in great demand. According to the group’s earnings from last year, of the $41.6 billion in revenue earned, $7 billion came from clothing and accessories. Costco’s low pricing model is still very attractive to middle-class Chinese consumers, however, the group had previously been accused of hiding the source of its luxury products, and Chinese media is now questioning the authenticity of those items as well.
Yoox Net-Porter and Alibaba joint venture appoints new CEO – BJ News
On August 28, more details were released about the joint venture between the U.K. luxury goods e-commerce group Yoox Net-A-Porter (YNAP) and Alibaba. YNAP will launch on Tmall’s Luxury Pavillion on September 30 this year after the appointment of a new CEO, Yating Wu, who comes from a high executive position in the Asia region of the British-Dutch consumer goods company Unilever.
& Other Stories Opens on Tmall – Sina Fashion
On August 29, & Other Stories, the high-end fashion label owned by Swedish clothing group H&M, launched an online flagship store on Tmall. Consumers will finally be able to purchase the brand’s ready-to-wear, shoes, bags, jewelry, and accessories online. This marks the label’s first expansion into the Chinese market, where Chinese consumers have long been buzzing on Little Red book about their & Other Stories shopping experiences around the world.
The brand opened its first store in London in March of 2013. It currently has 70 stores in Europe, the U.S., and South Korea, and online stores provide delivery services to 15 countries around the world. The Tmall launch is believed to be a soft test for the brand to build offline stores in China in the future. Very recently, the D2C brand Everlane also chose Tmall to be its first channel in China, which speaks to the importance of this local e-commerce giant for Western brands in the country.