With the recent shuttering of MatchesFashion and Farfetch’s emergency sale to South Korea’s Coupang, luxury multi-brand e-commerce in the West may be in a state of confusion.
However, these circumstances have not deterred German luxury e-commerce platform Mytheresa from intensifying its efforts to expand in China, amid a fiercely competitive market dominated by local giants like Alibaba and Douyin.
February 2024 saw Farfetch narrowly escape bankruptcy through a sale to South Korean giant Coupang in a pre-pack administration deal; by March, MatchesFashion had announced its shuttering. All the while, Richemont’s loss-making retailer Yoox-Net-A-Porter (YNAP) continues to search for a buyer.
CEO Michael Kliger outlined plans to target the world’s third-largest luxury market by employing personal shoppers and hosting in-person events. Despite the challenges posed by established players, Kliger remains optimistic, targeting growth rates that are double the company’s global average in the upcoming years.
Mytheresa aims to cater to discerning luxury consumers in China, particularly focusing on the top 3% of its clientele who contribute significantly to sales.
China’s luxury e-commerce industry is booming. As we recently reported, 56% of mainland luxury customers made purchases on JD.com in the previous year. With 50.8% of all B2C platform transactions coming from the e-tailer Tmall, which has the greatest market share in China, users average seven minutes each day on the site.
While competitors like Farfetch and Yoox Net-a-Porter have also pursued the Chinese market, platforms like Mytheresa are banking on its high-end positioning to carve out a niche. However, challenges still persist for lucury brands and retailers, especially in delivering service expectations for products shipped from Europe to China.
Western e-tailers should embrace a direct-to-consumer paradigm that prioritizes user journeys and creative AI styling, while simultaneously championing brand freedom, in order to learn from the success of China’s luxury e-commerce sector.