What happened
According to Business of Fashion, venture capital firm Sequoia Capital China has taken a minority investment in luxury e-retailer Ssense. Over 4.1 billion or 5 billion Canadian dollars are funding the company’s global expansion into China. That is the first external investment received by the Canadian e-commerce platform. As part of the deal, former Vogue China editor and now a venture partner at Sequoia Capital China, Angelica Cheung, will join its director board.
Luxury e-commerce retailer, Ssense was founded in 2003 by the Atallah brothers, piloting the vanguard of e-retail with a mix of luxury, streetwear, and avant-garde labels. In 2018, fashion commerce launched a Chinese online store to reach local consumers more effectively.
The Jing Take
The Chinese luxury market is expected to become the world’s biggest luxury market in 2025 after a strong recovery from the COVID-19 pandemic. Shoppers there have been buying online and in-store, and China’s continued appetite for international names presents a tremendous opportunity for luxury e-retailers like Ssense.
However, the market is heating up with more domestic (Tmall, JD.com) and global (Mytheresa, Luisaviaroma, and Farfetch) players. Today, the e-tailer must compete with big local players and early entries in China's aggressive market. In a crowded online space, luxury e-retailers must rely heavily on incentives to attract consumers, including discounts.
Yet, Ssense’s daring selection of emerging designers is undisputedly a preferred destination for young shoppers. The addition of Angelica Cheung may offer the business deeper insights into the local market. However, Ssense needs a boost on social media platforms — where its reputation is less developed — even more.
KOL seeding and user-generated content promotions might be an effective way for the e-retailer to raise its awareness. Moreover, excellent customer service will be indispensable for retaining loyalty from spoiled local consumers (the brand must keep an eye on social media complaints and promptly resolve them, for instance).
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.