Amid signs that the higher-end fashion and accessories market is stalling, Chinese luxury e-tailer Secoo is widening its offerings in surprising directions. And, ironically, the addition of non-luxury brand products is coming only after luxury titan LVMH’s equity investment arm, an alliance with Groupe Arnault Conglomerate, bought a $175-million stake in Secoo in July.
Secoo yesterday announced it expanded its product portfolio with gym memberships as part of its partnership with LVMH-backed L Catterton Asia, which operates Will’s Group gyms across China. The buyout firm invested in the gym chain in late November, in a deal that was rumored to be worth a stunning $400 million, though financial details were not disclosed. In July, L Catterton Asia and JD.com made their own joint investment in Secoo.
The move into lifestyle follows Secoo’s expansion into travel offerings and into athleisure wear. And the partnership brings a second high-end gym membership offering to Secoo, the first being Beijing-based Oxygym which offers members more than just a workout, with air purification systems.
It may seem like a niche market for online retail, but the fitness and gym industry in China is on pace for $6.91 billion in revenue in 2018 and has grown at an annualized rate of 10.4 percent between 2013 and 2018, according to market research firm IBISWorld’s report on Gym, Health and Fitness Clubs in November. Will’s has over 130 locations in 12 cities, making it one of the largest fitness companies in China.
Will’s CEO Will Wang said at the 2017 Chinese Sports Industry Carnival, “[Y]ou need to target the rich—in the future over 80 percent of the market will fall into the high end.”
Memberships to Will’s are not yet available online, but Secoo has already added the offering to its WeChat mini-program at $1,045 (RMB 7,188) for a one-year membership. The plan is to offer monthly memberships as well as a new premium annual membership, which customers can pay for in installments through Secoo.
For Secoo, focusing on domestic consumption in the lifestyle sector rather than cross-border e-commerce sales could be a smart move for the company considering the uncertainty of trade talks between the U.S. and China.