The Beijing delivery man who arrived with Christine Lin’s new silver bracelet came dressed in an elegant black suit — complete with white gloves.

He knocked on the door of her apartment holding a delicate black box tied with a golden ribbon. Handing it to Lin, he asked her to confirm receipt with a fountain pen. Inside, under layers of glossy wrapping paper, was the $90 limited-edition bracelet (from a brand co-founded by Hermes International and a local designer) along with a thank-you card from JD.com, the e-commerce site that had arranged the special delivery.

“It was so ceremonial,” said Lin, a 23-year-old app and product designer. “Shopping on these online platforms is like enjoying a visual feast that’s curated for you.”

Shoppers from China accounted for one-third of global spending on luxury items last year, and Chinese luxury consumption will nearly double to about 1.2 trillion yuan ($175 billion) by 2025 from 770 billion yuan ($111.856 billion) last year, consultancy McKinsey & Co. estimated in a report published April 26. But many in China are now making those high-end purchases online, a challenge for companies that have built their businesses and the aura around their brands by coddling shoppers inside swanky stores with personal service.

The changes are forcing global luxury companies to sometimes rethink decades-old strategies and test new ones tailored to the Chinese market.

New Strategies

Keeping Chinese consumers engaged is becoming critical as the economy slows amid the escalating trade war with the U.S. While the American market accounts for about 44% of global online sales of luxury goods, Asia is the new growth engine of high-end brands, according to Bain & Co.

That’s why many big names in luxury are teaming up with internet companies to offer sales and services like the white-gloved butler-style delivery that are rare in the U.S. They’re hoping to appeal to younger consumers just getting started buying designer jewelry, clothes, or accessories. Still, selling online carries added risks for brands who’ve built their lofty cachet by emphasizing exclusivity.

“They don’t want to be too accessible,” said Clement Ledormeur, general manager of 31Ten, a digital consulting agency in Shanghai. “You can’t be next to underwear or a pair of slacks.” That’s one attraction of platforms dedicated to designer goods, like Alibaba Group Holding Ltd.’s Tmall Luxury Pavilion, he said.

Chinese online retailer JD.com Inc. and London-based Farfetch Ltd. in February announced a deal to merge JD’s luxury site Toplife into Farfetch China. The deal provides JD customers with access to the British retailer’s more than 1,000 luxury brands.

Choosing Cautiously

At Ralph Lauren Corp., e-commerce sales are up across the board, but chief executive officer Patrice Louvet said he looks at online shopping with caution, carefully selecting the places that make sense for his brand to live on. In China, that includes both Tmall and JD.com.

“We’re not jumping on every single opportunity out there,” Louvet said in an interview of his e-commerce business globally. But “if that’s …read more

Source:: Fortune

      

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With White-Glove Service, China’s $112 Billion Luxury Goods Market Is Shifting Online

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