hnnhcronin Cult luxury brand Yves Saint Laurent recently announced its plans to launch online sales in China. Tapping into the fastest growing market has been a major goal of high fashion brands; however, many luxury brands have been reluctant to sell online due to concerns with counterfeits. As of now, Yves Saint Laurent has 18 brick and mortar stores in China, much less than most of its competitors, such as Louis Vuitton, but the opening of online sales is expected to peak Chinese young adult interest in the brand.
Yves Saint Laurent will open online sales through an online platform opened by UK luxury online retailer farfetch and Chinese luxury e-commerce website JD.com. Farfetch and JD.com agreed to a partnership in order to increase luxury e-commerce of authentic goods in China. JD invested $397 million in Farfetch as a part of the deal. JD provides same day deliveries to most urban locations throughout China, and Farfetch offers a selection of authentic items from well-respected brands. Since JD’s partnership with Farfetch, luxury brands such as YSL are more confident that JD will not play a part in the sale of counterfeit goods. In order for online expansion into China to be successful, it is almost essential to partner with one of China’s main e-commerce sources JD.com and Alibaba Group.
According to Matthew Dalton of the Wall Street Journal, Beijing is trying to prevent Chinese returning from another country from bringing in expensive products, so increasing sales from Chinese on their home territory is key to the success of modern luxury brands. The Chinese are notorious luxury spenders, and with the rise of e-commerce, the younger generation of Chinese consumers are buying an increasing number of luxury products through the internet. Yves Saint Laurent has promised same day delivery to Hong Kong, Shanghai, and Beijing. Despite Saint Laurent’s shortage of stores outside the major cities, the new e-commerce platform will allow the Chinese in less populated areas to have access to a Saint Laurent. This approach is more strategic since stores in areas with low population density tend not to get enough foot traffic to be profitable, often becoming a burden to the company rather than a benefit.
If Saint Laurent successfully establishes a sizable e-commerce base in China, it could be huge for the company’s growth, especially considering it would be one of the first luxury brands to explore that territory. With Yves Saint Laurent’s rising sales and growth potential in the Chinese market and Gucci’s massive success under creative director Alessandro Michele, Kering-the owner of the two brands- can continue to dominate the high fashion industry.
Sources:
Dalton, Matthew. “Saint Laurent to Launch Online Sales in China.” The Wall Street Journal, Dow
Jones & Company, 31 July 2017, www.wsj.com/articles/saint-laurent-to-launch-online-sales-in-china-1501473601.
“JD.com and Farfetch Partner to Open Ultimate Gateway for Bringing Luxury Brands to China.”
JD.com, Inc., 22 June 2017, ir.jd.com/phoenix.zhtml?c=253315&p=irol-newsArticle&ID=2282403.
Writer, Staff, et al. “Saint Laurent Links with Farfetch for Omnichannel Retail in China.” Retail in Asia,
2 Aug. 2017, retailinasia.com/uncategorized/saint-laurent-links-with-farfetch-for-omnichannel-retail-in-china/.
