All eyes in the global luxury industry are on Burberry’s trailblazing new e-boutique on Alibaba’s e-commerce platform Tmall. As the only non-cosmetics global luxury brand on the discount-oriented site, Burberry has left many industry experts wondering how its image and sales will fare.
After its April 23 launch, the first results are in thanks to the China National Textile & Apparel Council, which has been closely watching the brand’s progress. So far, the new store has had “strong” reception according to L2 Think Tank, which found that 1,500 fans reposted news of the e-boutique opening on Sina Weibo in the first few hours. In terms of sales, the shop is selling more lower-priced items with a high return rate. According to L2’s translation of the Council’s findings:
In 18 days, Tmall sold more than 132 products. But 32 of the pieces have already been returned, resulting in a 26.4% return rate far higher than the 7.2% average for similar items sold on Tmall. So far, fragrances make up the majority of the Tmall store sales, the rest being polo shirts, jeans, and pants. The store recorded no sales of higher-priced items such as purses and trench coats.
Burberry has been highly successful in service quality feedback so far, earning a 60 percent higher rating than the average Tmall store.
As Jing Daily previously discussed, the new e-shop was likely launched to combat China’s online “gray market” of fakes and smuggled products available on Alibaba’s Taobao and Tmall. According to the Council, overseas sellers on Taobao claiming to be selling real goods sell items for around 30 to 40 percent cheaper than those on Burberry’s Tmall page. The Council said Burberry’s effect on these sellers does not seem to be large at the the moment.
The peace of mind for consumers looking for real items may eventually pay off, however, since prices are still high for many items being sold by individual sellers. For example, the Council says that an item that costs 8,250 yuan ($1,324) on Burberry’s Tmall page can be found on Taobao from a seller from France claiming to have the real item for 5,600 yuan ($899). The cheaper price is still pretty hefty for an item that isn’t completely guaranteed to be real, since China’s gray market is known for being full of unsavory sellers trying to pass off fakes as genuine. As a result, consumers looking to buy real items may be willing to pay the premium for the guarantee that they aren’t being ripped off.