The biggest advantage of e-commerce is the absence of geographical restrictions. So said Eric Chan, the recently appointed CEO of luxury e-tailer Secoo, in an interview with Chinese fashion news site No Fashion.
Chan also said that luxury brands can’t possibly open physical stores in every city in China, and that as the growing pool of middle-class consumers living in cities that are not first-tier upgrade their spending, online channels will be the only tangible way to reach them.
Why should we care what Chan says?
At a time when tech giants and fashion brands are regularly making ambitious strides in luxury e-commerce and upsetting the eco-system in which smaller outfits like xiu.com (whose CEO Ji Wenhong was arrested for smuggling luxury goods) are trying to stay alive, Secoo is considered a survivor.
The company, which was founded in 2008 and has over 15 million high-end customers (who spend, on average, between 3,000 and 4,000 yuan (US$430-$580) per purchase), recently moved into the spotlight after becoming Dior’s exclusive e-commerce partner for the brand’s Chinese Valentine’s Day campaign.
When Gucci and Louis Vuitton launched their own e-commerce platforms this year, many speculated that the move would cripple those brands’ presence on third party platforms such as Secoo. But Chan thinks of the brands as partners rather than competitors.
“For example, the way we work with brands is at both the online and offline level,” Chan told No Fashion. “If a customer makes an order on Secoo, they can pick up their order in the store. This is a natural way to direct customers to our clients, the luxury brands.”
Another value add for brands is the data they accumulate on the habits of Chinese consumers, which can help brands localize their China strategy. This data can help consumers personalize their offerings. He noted that the trend of personalization is growth engine for high-end e-commerce market.
As the former general manager of shopping mall K11, with over 20 years of experience in the management of high-end commercial properties in both mainland China and Hong Kong, Chan emphasized the importance for a luxury e-commerce platform to have a physical presence. “Chinese luxury consumers still want to have a five senses experience for the products they buy.” The retail veteran said in the next few months, Secoo will add five concept stores that could the form of a cafe or a teahouse.
Secoo opened its first offline luxury experience center and quickly followed suit with similar outlets in Milan, Hong Kong and Malaysia, as well as in other countries and regions.
According to Chan, luxury e-commerce, in fact, has just begun, the questions that many currently face are not whether this is an easy task to accomplish, but how to accurately grasp the customer and the market.