It is undisputed that the offline touchpoints of luxury brands in China were severely impacted during the first two quarters of the year due to COVID-19. Brands that had e-commerce structures already in place were able to partly mitigate their losses with the help of online transactions, but those that didn’t found it difficult to generate sales during the period. E-commerce might sound like the simplest solution to all brand woes in this case, but building up a sustainable e-commerce business in China is easier said than done. It is a long-term investment not only in terms of money, but also when it comes to resources and time. How should brands start on this journey?
The upcoming Luxury Society Keynote Shanghai will take place on 26 November and will be focused on The New State of Commerce in China. Top-level luxury executives will be sharing their experiences and opinions in the form of presentations, interviews and discussion panels. Among them is John Liu, Founder, Chairman and Chief Executive Officer at Buy Quickly, a leading e-commerce solutions provider in China.
It is reported that online channels accounted for one-third of China’s total luxury market this year due to the pandemic, up from 12 per cent in 2019. You founded Buy Quickly in 2011 when both the e-commerce ecosystem and digitisation of the fashion industry was still in its early stages. How did you identify the opportunity at that time?
Although the luxury industry had yet to fully delve into e-commerce at that time, Buy Quickly was already positioned as a partner for premium brands from as early as 2011. Between 2015 and 2016, some affordable luxury brands started working with us on e-commerce, and so we switched tracks and started to target the luxury industry. At that time, none of our competitors had any experience in the luxury sphere, and Buy Quickly ended up being the most relevant choice, making it natural for us to forge this connection with luxury brands.
During the process of transitioning from premium brands to luxury brands, what kind of challenges did you encounter?
There is a very high threshold when it comes to operating e-commerce channels for luxury brands, both in terms of the overall presentation and in terms of customer service and experience. Just take for instance, in terms of logistics: It takes more than 40 minutes just to prepare one luxury watch for shipment. So you can imagine the level of demand in terms of service. This, in turn, also raises the expectations placed on our team and infrastructure.
As such, we have to continuously recruit excellent individuals to meet the requirements of luxury clients. But at present, given that luxury e-commerce is still in its early stages, there is still a shortage of talent on this front. Thus, combining external talent with training for our internal team is mandatory – this is our current challenge.
What other kinds of opportunities do platforms like Tmall and JD.com offer to brands apart from directly driving sales?
In terms of sales volume, Tmall still has the highest – but a brand’s options are not limited to Tmall. That said, Tmall is more than just a sales channel, but also serves as a marketing and advertising platform. For instance, we organised a Super Brand Day for a jewellery client. Sales hit over 10 million RMB during the event and the brand gained between three to five million new followers. Benefits went beyond just conversions, and extended to awareness and prospect recruitment.
Last year, Buy Quickly introduced the concept of the New Intermediary Partner and started offering an “Omni-field” service. Can you tell us more about it?
Our understanding of Omni-field is simple: Omnichannel and Omni-link. Omnichannel includes online channels, third-party social media platforms and e-commerce platforms, as well as the official website and Mini Programs. The other part is offline. That is why we need a one-stop online and offline solution – this is one of the dimensions. The other dimension is Omni-link, which includes branding, merchandising, operations, customer service, IT solutions, warehousing and logistics for brands entering China. When a brand enters the Chinese market, we can help to establish its presence in an efficient manner.
Chinese social media platforms like Weibo and Douyin are building up their e-commerce offering as well. What kind of edge does Tmall offer to luxury brands?
I think the first thing is the level of consumption. Tmall has more than 700 million users, many of which are luxury customers. There is no doubt when it comes to volume. Another key point is that Tmall’s consumer group is very young, and young consumer groups are the main driving force in future luxury consumption. So there are still many opportunities for luxury goods on Tmall, and we are very confident about the growth of luxury goods online next year.
LS Keynote 2020
Thursday, 26 November
The New State of Commerce in China
The Luxury Society Keynote Shanghai 2020 will also be broadcasted live. For more information and to register for the online event, please visit this website.
Cover Image: Buy Quickly