“NetEase Premier” Touts “Global Brands,” “100 Percent Authentic Products,” “7 Day Return Policy”
While Taobao maintains a dominant lead in the nascent Chinese e-commerce industry, several startups are looking to get a piece of the burgeoning market by specializing in international luxury brands. Following the lead of Shouke, a members-only flash sale site run by Adrienne Ma, and Yoox, the Chinese online portal NetEase (网易) has launched its own luxury online shopping platform, “NetEase Premier” (l.163.com). Touting discounts of up to 80 percent on top brands like Hermes, Gucci and Louis Vuitton, NetEase Premier is the portal’s third foray into e-commerce, following its NetEase mall, online travel business, and third-party online payment service, ePay (网易宝).
According to NetEase, the “Premier” platform stocks watches, handbags, apparel, shoes and jewelry. Addressing concerns about counterfeiting, NetEase Premier provides certificates of authenticity with every purchase. In recent months, we’ve seen moves by competitors like Yoox to combat counterfeiting by inserting RFID chips into each item it sells in mainland China. Additionally, NetEase is heavily promoting its 24-hour customer service hotline, 7 day no-questions-asked returns, and national shipping service. Currently, NetEase Premier supports three payment methods: NetEase ePay, online bank transfer, and Yeepay (联通卡).
Chinese-language media notes that China’s budding online luxury retail sector coincides with stricter enforcement of “Customs Rule 54” (海关54号), put in place late last year, which imposes stricter retroactive customs taxes on luxury goods worth more than 5000 yuan (US$760) purchased overseas. While similar rules have been on the books for quite a while, Chinese analysts recently pointed out that authorities sought to better enforce the law after the rampant smuggling of Apple’s iPhone and iPad from Hong Kong.
According to recent estimates, only around 30 percent of luxury goods purchased by mainland Chinese are bought within the country, with 60-70 percent of purchases being made in Hong Kong, abroad, or via third-party shoppers based in Europe or North America. With the stricter implementation of Rule 54, and the murmurs we’ve heard about more crackdowns on luxury goods coming across the border from Hong Kong or Macau, it’s no surprise shopping platforms like Shouke and NetEase Premier are starting to proliferate.