What happened
Gucci is joining Louis Vuitton, Bottega Veneta, and 500 other top luxury brands on JD.com. In celebration of Qixi, also known as Chinese Valentine’s Day on August 22, the Italian luxury house officially debuted an online flagship store on the Chinese e-commerce platform on August 16.
Integrated with cutting-edge technology, the online flagship store supports AR, VR, and 3D solutions, providing 360-degree product views and a virtual try-on feature.
Alongside an extensive range of timeless icons and the latest ready-to-wear, handbags, shoes, jewelry, watches, and accessories for men and women, the 102-year-old brand is offering a curated selection of floral-themed gifts and a limited-edition purse and flower gift box exclusively designed for JD.com customers to celebrate the romantic occasion.
Additionally, shoppers can personalize a greeting e-card to gift with their purchase and receive special access to Gucci’s online client advisor service before ordering their desired products.
The Jing Take
Gucci relies heavily on the Chinese market. According to Barclays, China accounts for around 35 percent of the Italian Maison’s sales compared to 27 percent for LVMH and 26 percent for Hermès. As a result, the brand was hit hard during China’s lengthy Covid-19 restrictions, with sales shrinking 14 percent year-on-year in the fourth quarter of 2022.
The end of the lockdown has lifted Gucci’s performance in China, as consumer appetite improved from mid-March and has accelerated each month since. The partnership with JD.com reflects the Florentine house’s renewed confidence in the country and its continued investment in the market.
In the first quarter of 2023, online sales in China grew 8.6 percent year on year (YOY), reaching 477 billion (3.29 trillion RMB), according to the Ministry of Commerce. In 2022, online transactions among international luxury brands in China rose 31 percent YoY to 30.2 billion (220 billion RMB), reports Yaok Institute.
With local shoppers getting acquainted with buying luxury goods online, brands are diversifying their digital sales channels to reach a broader audience. And JD.com is a great place to start, providing access to nearly 600 million customers.
Kevin Jiang, vice president of JD.com and president of key accounts, business development, & JD retail fashion, shares, “Our high-quality customer base is ideal for luxury brands. Remarkably, our platform boasts the industry’s lowest return rate and highest average ticket price, surpassing even brands’ own channels.”
Plus, the platform has a relatively higher proportion of male users compared to other e-commerce platforms, making Qixi an ideal opportunity to introduce new products and attract users.
As brands look to upgrade their digital services, the battle between Tmall and JD.com has intensified. The latter, for example, has introduced expedited deliveries that connect with in-store stock to offer a more seamless customer journey.
“Our specialized JD Luxury Delivery, also known as White Glove Delivery, and intra-city delivery services are tailored specifically for luxury brands. When launching a marquee brand like Gucci, we can offer same-day delivery in major cities,” says JD.com’s Jiang.
With online purchases becoming the new normal, staying on top of digital innovation and establishing an omnichannel presence will be essential for brands to connect with China’s tech-savvy luxury consumers.
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.