Bottega Veneta's China Ambition May Come Too Late

Bottega Veneta is playing catch-up in China. But are they too late? On December 18, the Italian fashion veteran joined top-tier luxury brands such as Valentino and Ermenegildo Zegna by launching a flagship store on Alibaba’s Luxury Pavilion. It aims to carve out a bigger slice of the Chinese market as the brand steps up its expansion in the world’s second-largest economy. The new store on Alibaba’s luxury portal will offer a wide range of products ranging from leather goods, apparel, footwear to jewelry & accessories and home décor, the brand said in a release on WeChat. To celebrate the launch, Bottega Veneta unveiled a limited edition “Luna” handbag (retail price at 2,560 or RMB 17,650), which is exclusively available on the platform. To further encourage consumers to place their first orders on Luxury Pavilion, it opted to gift the first 30 customers whose purchases exceed 1,160 (RMB 8,000) with signature intrecciato leather cardholders. Bottega Veneta became just the latest high-profile luxury player to join Luxury Pavilion, following in the high-heeled footsteps of industry competitors such as Givenchy, Stella McCartney, Valentino, and Zegna. The platform, launched by Alibaba in late 2017, has acquired more than 100,000 users whose average spending on the site has reached a staggering 159,000 (RMB 1 million), according to the company. Since 2015, China's personal luxury goods market has embarked on an exceptional growth thanks to the entry of affluent Chinese millennial and Gen-Z consumers. However, Bottega Veneta’s performance in the Chinese market over the past three years has bucked the bullish trend, often being outshined by its peers like Gucci and Saint Laurent from the same parent company Kering Group. Though no specific sales data was available from the company, certainly the visibility and popularity of the brand among Chinese luxury shoppers have been low compared to other brands in recent years. Globally, its sales started to slow in 2015, falling nearly 10 percent to 1.4 billion in 2016 and remaining constant in 2017. This year, the brand divorced its long-time creative head Tomas Maier and hired fresh young designer Daniel Lee, with the hope of bringing innovation. Lee’s debut Pre-Fall 2019 collection, revealed last week, received positive reviews from the fashion industry, with many believing that this Celine alum is likely to fill the void in a market that is missing Phoebe Philo’s old Céline so much. Bottega Veneta’s launch on Luxury Pavilion is poised to facilitate the brand attempt to gain more visibility and generate sales from the Chinese market. Since earlier this year, the brand has also started to localize their offerings in the market, including hiring a popular Chinese brand ambassador Jackson Yee, opening more retail stores in lower-tier cities like Harbin, Changsha, and Xi’an, and utilizing the WeChat commerce channel to sell to online consumers. Of course, a strategy of being slow and steady in a foreign market can never go too wrong, especially with a heritage brand like Bottega Veneta. Nonetheless, as the whole luxury industry starts to feel the pain from political uncertainties and economic slowdown, it will no longer be as easy as it used to be for brands to profit in China.

Bottega Veneta's China Ambition May Come Too Late

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Published December 19, 2018

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Bottega Veneta's China Ambition May Come Too Late