Can Two Chinese Luxury E-Tailers Move The Needle By Teaming Up?

    Luxury e-commerce competitors Secoo and Qudian’s Wanlimu decided to work together for a greater goal, but what will that mean for the market?
    Fintech service provider Qudian is teaming up with Secoo with its two-month old luxury e-commerce platform Wanlimu. Photo: Shutterstock
    Yaling JiangAuthor
      Published   in Technology

    What happened

    Luxury e-commerce platform Secoo Holding Limited and Qudian, Inc., the parent company of the two-month-old luxury e-tailer Wanlimu, recently announced a strategic partnership and an investment.

    Qudian, which primarily specializes in fintech services, has agreed to purchase $100 million-worth (or 28.9 percent) of Secoo’s shares, according to a statement. The deal makes the Xiamen-based company Secoo’s largest stockholder.

    Secoo and Qudian also agreed to work together in the luxury e-commerce market. “Our partnership will bring value to both Secoo and our Wanlimu platform, and also establish a good foundation for a better user experience for our customers,” said Min Luo, the founder, chairman, and chief executive officer of Qudian.

    Jing Take#

    The investment and partnership show that both companies are ambitions about grabbing a bigger slice of China’s luxury e-commerce market, which has been dominated by Alibaba's Tmall Luxury Pavillion and Interestingly, the industry rarely sees a collaboration between domestic players, and Alibaba and have only worked with overseas players — Net-A-Porter and Farfetch, respectively — through joint ventures or acquisitions.

    It’s obvious what Secoo and Qudian can each bring to the table: The 12-year-old Secoo has the luxury market know-how, whereas Qudian understands financial services and direct-sourcing capabilities (as advertised on Wanlimu). The fact that these two companies are local also means that they can avoid the typical partnership problems that arise between a Chinese company and a foreign entity like a prolonged decision-making process and miscommunications.

    Wanlimu previously tapped top-tier actors such as Zhao Wei and Huang Xiaoming to promote the platform. Photo: Wanlimu's Website
    Wanlimu previously tapped top-tier actors such as Zhao Wei and Huang Xiaoming to promote the platform. Photo: Wanlimu's Website

    Competitors only become allies when they have common enemies, and for these two, it’s the e-commerce giants Tmall and Qudian, which recently reported a 54.3-percent drop in group-wide revenue during its first quarter, is the one taking a larger risk here. And as its founder stated, the company will invest even heavily in Wanlimu’s inventory, sales, and marketing. It will be interesting to see if any of these efforts can move a needle in this top-heavy field.

    The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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