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While many high-end brands remain wary of selling their items online for fear of diluting their image, a growing number of watch and jewelry labels are diving into China’s booming e-commerce market.
In November 2015, both Cartier and Van Cleef & Arpels soft-launched their China e-commerce sites, according to a new report by FDKG. These brands followed Tag Heuer’s launch on online sales platform JD.com in September, while Piaget and Montblanc are also in “soft-launch” phases of their Chinese online shops.
As luxury brands weigh the risks and benefits of selling online, they’re taking note of several key upsides—in addition to easy acceptance of Chinese payment methods such as Alipay, “putting prices online may actually accelerate a purchase decision and decrease deliberation,” says the report. In addition, the items are available to affluent buyers in areas of China that don’t have easy access to a nearby store, such as those in lower-tier cities. These shoppers often utilize sketchy daigou sellers simply because that’s the only option available if they’re not traveling.
Online sales in China certainly aren’t without their risks, however. Logistics and ensuring the safe delivery of a package can still be challenging in the country, meaning that many wary consumers will only order a package if there’s a cash-on-delivery option—a difficult proposition when it comes to a Cartier necklace. Their trust is rapidly growing, but it’s not there yet—a recent KPMG survey found that Chinese luxury consumers are mainly willing to buy goods worth 4,200 RMB and under online. They may be willing to pay more in the future, since last year’s survey found they were only comfortable with spending 1,900 RMB.
According to the report, most brands are in “soft-launch” mode because they’re cautiously testing the waters of the Chinese e-commerce market. If brands can convince consumers that the quality of service and reliability are just as high online as in-store, a growing number of China’s affluent may be more willing to pick up a 15,000 RMB necklace while browsing online.