Hong Kong Distribution Center To Be Net-a-Porter’s Third Worldwide#
No stranger to the China market, having acquired the members-only discount e-tailer Shouke.com and launched a Chinese version of its “Outnet” last year, e-commerce powerhouse Net-a-Porter is set to make its biggest moves in the country to date, launching a new Chinese-language version later this month.
According to the New York Times, the new Chinese-language site (which accompanies French and German versions) comes in tandem with the launch of a 12,000-square-meter Hong Kong distribution center that should cut down on delivery times in the Asia-Pacific region.
As the New York Times adds:
“The primary reason for choosing to open a distribution center in Hong Kong is because it’s a free port with strong courier networks, which will allow us to improve on our existing shipping service time period by around one day,” said Adrienne Ma, a senior vice president of Net-a-Porter Asia Pacific Group. “We plan to offer a same-day delivery service in Hong Kong and next-day shipping service to major cities in Australia soon.”
The Hong Kong center will be Net-a-Porter’s third, after New York and London, but it will rely on 100 employees to pack and ship merchandise as the building’s ceilings are not high enough for the automated system used in the other locations.
Already enjoying massive popularity among China's more discriminating, wealthier luxury online shopper contingent, owing to its inventory of well-known as well as niche designers and labels, Net-A-Porter's moves look two-fold.
Aimed at building a stronger foothold in the region, the new Chinese-language site and Hong Kong distribution hub should also help increase competitiveness in a highly contentious Chinese luxury e-commerce market. Far from a blank slate, the luxury e-commerce segment in China, though young, is populated by major players like Hong Kong's Lane Crawford -- which also operates physical stores in Hong Kong and mainland China and has strong existing distribution networks -- as well as international heavyweights like Yoox (which had its China launch last fall) and Neiman Marcus, and up-and-coming domestic sites like Shangpin.
Still, Net-A-Porter is not exactly new to China, and already enjoys high name recognition. As additional selling points, the site's free shipping to China and famously high-end packaging are major pluses in the perk-loving market.
However, one point worth mentioning is that Net-A-Porter's new China version, unlike those of several of its competitors, will be missing a key feature that Chinese shoppers have largely come to expect. As the New York Times points out, Net-A-Porter will not accept payment in renminbi, a slightly puzzling omission considering the growing importance of the mainland China market. According to the Net-A-Porter website, the site does not yet accept other popular Chinese payment methods like UnionPay or cash-on-delivery.
Along with domestic Chinese e-commerce sites, both Neiman Marcus and Lane Crawford accept payment in RMB and offer a range of Chinese payment options. This could cause problems for some Chinese consumers, as the NYT illustrates:
“Customers in Hong Kong can shop in Hong Kong dollars and Australians in Australian dollars. The rest of our Asia-Pacific customers, including those in China, can make purchases in U.S. dollars,” Ms. Ma said. So, unless mainland customers have overseas accounts or accounts in U.S. dollars at mainland banks, they will not be able to shop online with Net-a-Porter.