As Jing Daily reported last week, the American luxury retail group Neiman Marcus is finally set to kick off its much-discussed China expansion with a US$28 million investment in the privately held e-commerce company Glamour Sales Holding. Rather than digging into the market with a major roll-out of brick-and-mortar locations in China, Neiman Marcus, in partnership with Glamour Sales, plans to focus solely on the lucrative online retail market. By the end of this year, Neiman Marcus and Glamour Sales will launch an all-new Chinese-language e-commerce website, offering shoppers an “expertly curated mix” of full-price, current-season offerings. According to Neiman Marcus Group CEO & President, Karen Katz, “Our strategic investment in Glamour Sales gives us a tremendous partner and a strong foothold in a rapidly expanding luxury market.”
To get a little more insight into the Neiman Marcus Group's broader strategy for the China market, Jing Daily recently exchanged a Q&A with Shanghai-based Group rep Chris Luan.
: We know is that the Chinese customer appreciates authentic, traceable luxury goods and great service, which is what we’re known for.
A recent report estimates that two-thirds of Chinese city-dwellers will be on the Internet by 2015 and outside of urban centers nearly one-third are expected to be online by then.
Domestic luxury consumption is projected to nearly triple over the next several years to US$37 billion and e-commerce is expected to account for $5 billion of that. So, there’s every indication of tremendous growth in front of us. According to one estimate, the Chinese spent $16 billion on luxury items last year. That’s about a quarter of the entire world market.
: As in the United States, we believe there are local boutiques and stores that we could compete with, as well as many of our own vendors. We believe competition only makes us stronger.
The Neiman Marcus Group website will be unlike anything that exists today in China. While luxury brands are widely available to the Chinese consumer, we will be providing the convenience of 24-7-365 online luxury shopping along with our world-class customer service and our more than century-long heritage of leadership in fashion retail.
: Chinese customers are growing increasingly savvy about luxury goods and there’s surging demand in the Chinese market for a website that brings to life the multi-brand, high-service, luxury retail experience provided by Neiman Marcus and Bergdorf Goodman.
China is projected to quickly surpass the United States as the largest online commerce market in the world. In 2006, less than 10 percent of China’s urban population shopped online; over the next five to 10 years, economists, retail industry analysts and other research forecast that figure to skyrocket to 44 percent. Over the next several years, China is projected to overtake Japan as the number-one luxury market in the world reaching an estimated $37 billion in annual sales.
The Chinese, at home and abroad, account for 20 percent of global luxury sales. And in China, sales of luxury goods are growing as fast as 35 percent per year, by some estimates.
In the U.S., The Neiman Marcus Group led the way online in luxury retail. Over the past decade, we have built robust, very successful websites and we plan to do the same now here in the important and fast-growing Chinese market.