Chinese consumers’ purchasing habits are increasingly driven by the need for instant gratification, and luxury products are no exception. In e-commerce, the more obvious way this manifests itself is in the shipping process — high-end delivery services in China rarely take longer than one or two days to put products in the hands of shoppers.
But this need for speed also applies to fashion itself. For years, the luxury fashion industry has operated on a model that means brands’ collections reach stores almost half a year after they have been showcased on the runway, giving buyers and retailers the ultimate say in choosing which designs make it to the customer. The past few seasons, however, have seen a shift driven by a social media-fueled demand for immediacy, where brands like Burberry and Tommy Hilfiger have adopted “see-now-buy-now” models, letting their fans shop looks straight from the catwalk at events known as trunk shows.
While this trend has started to lose steam elsewhere due to the difficulties brands face in amending their well-established supply chain and distribution systems, the “see-now-buy-now” model is only becoming more popular in China. One prominent example is Tmall’s “see-now-buy-now” fashion show during its Singles’ Day (11/11) shopping event. Now two years in the making, the online event gives consumers the opportunity to pre-order looks from luxury brands ahead of the Singles’ Day shopping event. The collections are featured in a runway show that is livestreamed on multiple video platforms.
Events like these suggest there is huge potential in catering to Chinese consumers’ need for instant gratification. Adrian Cheng, founder of K11 Art Mall and Chow Tai Fook heir, recognized this when he took a ‘significant’ stake in Moda Operandi, a U.S.-based luxury e-commerce company that operates on a pre-order trunk show model.
With Cheng’s investment through his C Ventures and K11 Investment arms came the announcement late last year that Moda Operandi is setting its sights firmly on the Chinese market and has plans to open more boutiques in the region. Cooperation with the K11 Art Mall is also in the works.
“Asia, and China specifically, is on the forefront of our business strategy as we see tremendous opportunity to grow our customer base within the region through our unique business model,” Moda Operandi’s CEO, Deborah Nicodemus, told Jing Daily.
Moda Operandi is known for giving their customers exclusive access to collections from designer brands through both online and offline trunk shows that coincide with the brands’ runway events. “Clients are empowered to purchase looks without being limited to the edited selection made by a traditional retailer,” Nicodermus said. “We also offer exclusive capsule collections from designers we know our customers love.”
Moda Operandi also takes this a step further with personal stylist services, that include in-home visits, wardrobe consultation and organization, and travel concierge services. “We essentially cater to our customers’ dreams,” she said.
These customers, a spokesperson for K11 Investment told Jing Daily, are primed for a Moda Operandi to bring its unique value proposition to the market.
“The booming upper-middle class in China is a well-travelled, well-cultured one, and much more discerning than most people think,” they said. “When it comes to big-ticket items, such as fashion pieces, this group does their research by following blogs, pop-up shows and Fashion Weeks—many even attend them. They also appreciate original pieces and enjoy bespoke shopping experiences, which is why personal stylists will be big in China.”
In the domestic Chinese market, there are already pre-order e-tail companies aiming to capture a similar group of sophisticated, instant gratification seeking consumers. Bobo Rok, the Shanghai-based founder of luxury pre-order platform LuxTNT, gives her customers insider access to designer showrooms during fashion week through interactive livestreaming events led by KOLs. Shoppers who watch the livestreams can then pre-order the collection off the showroom floor.
During Paris Fashion Week last season, Rok said LuxTNT’s livestreams received almost 20 million views. Many of the brands featured are are lesser known labels who then have a direct line with which to share their brand story with potential fans. Rok said that currently, jewelry and accessories tend to be more popular categories on her site as they pose less of a risk in terms of fit.
Rok told Jing Daily that while instant gratification is a factor influencing her business model, she finds that giving customers a digital showroom experience and a limited period in which they can pre-order clothing also fills a void that’s created when shopping exclusively takes place in an online store.
“It’s very important to engage people and mimic that impulse buying experience they would have in the store,” Rok said. “Online, it’s very difficult to create a shopping experience—a lot of retailers have to deal with people putting things in their basket and never checking out. That would be less the case in a store because if you put something in your basket and don’t buy it, you think ‘what am I doing here?’ The salesperson’s enthusiasm will also push you to actually finish shopping and pay for it.”
Business models that build upon the more traditional online shopping experience could be a boon to China’s luxury e-tail industry as, despite the prevalence of e-commerce itself, is still struggling to gain ground. According to an August 2017 report by McKinsey & Company, official online channels generate only about seven percent of luxury sales in China. With this in mind, the industry will likely see more bridge building like that of K11 Investment and Moda Operandi to create more tangible engagement while also tending to the expectations of digitally-savvy consumers with short attention spans.
“The way we look at Moda Operandi is that it's not just an e-commerce business. It's a service business,” said the spokesperson for K11 Investment. “It's a brand that represents luxury and offers curated customer experience. Even in a digitalized luxury world, customers would still seek a more personalized experience, and this is where Moda Operandi’s core strength lies.”