What happened
Marc Jacobs Fragrances’ official Tmall flagship store will cease operations on Saturday, with membership benefits expiring at that time. The news has prompted widespread disappointment among consumers.
The brand’s Tmall customer services cites “operation adjustment” as the reason for the flagship’s closure. Consumers will still be able to purchase Marc Jacobs products through Sephora’s Tmall flagship store and offline locations. This indicates that Sephora will be the brand’s sole sales channel in China.
The US label’s fragrance line is struggling in the Chinese market. Its Tmall flagship store has 625,000 followers, but apart from the Classic Daisy Eau de Toilette (2,000 units sold), the other listed products have average sales of around 200 units. In contrast, LVMH’s Dior has 5.77 million followers on Tmall, with top products selling over 100,000 units.
Last month, rumors emerged that LVMH was looking to sell Marc Jacobs and was seeking buyers. Although LVMH quickly denied these claims, the speculation raised intriguing questions.
The Jing Take
In 2009, Marc Jacobs partnered with beauty conglomerate Coty to develop its fragrance business. With Coty’s support, Marc Jacobs’ perfume line quickly rose to become a top-10 global fragrance brand.
“Marc Jacobs’ fragrances have achieved great success, growing to become one of the top 10 female fragrances world-wide, thanks to the iconic Daisy Marc Jacobs and Perfect Marc Jacobs franchises,” Coty CEO Sue Nabi said in a press release.
The brand entered the mainland market in July 2012, and by 2013, China had become its second-largest market after the US. According to Marc Jacobs' WeChat account, the brand has 16 stores in China, with online channels comprising its Tmall store and official website. At that time, CEO Eric Marechalle said, “Our customer base in China continues to grow, and expanding digital channels is key to meeting their needs. Entering Tmall will further drive our strategic expansion in China.”
Once a leading global fragrance brand, Marc Jacobs’ withdrawal from China is a stark reminder that not all brands can capitalize on market opportunities and thrive in the market.
In tandem with scaling back Marc Jacobs’ channel layout, LVMH is relaunching Fendi’s fragrance business. On May 17, to mark the brand’s anniversary, Fendi launched a new fragrance series, making its return to the perfume sector after nearly a decade. The new collection is expected to enter the Chinese market in September.
Concurrently, LVMH appointed Pierre-Emmanuel Angeloglou, who has over 20 years of experience with L’Oréal, as CEO, effective June 1. This move underscores LVMH’s ambition to bolster its fragrance business, opting to tilt resources towards high-end couture lines to strengthen its position in the Chinese market.
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.