Michael Kors Chinese New Year campaign image
Luxury brands can no longer forego a presence in China and hope to make up the difference with tourists, according to a new report by L2.
Double-digit growth days are over in China, and even if it will continue to grow at rates that will make western countries envious, its domestic luxury market contracted in both 2014 and 2015. With China growing, brands will need to adjust to digital issues ranging from poor localization to varied pricing as they compete for a clearly finite market.
?Brands have primarily held back from ecommerce in China for fear of diluting their brand and image,? said Danielle Bailey, study lead at L2. ?They believe their brand will be swimming in a sea of counterfeits and grey market re-sellers; however, consumers, especially luxury shoppers are looking for authenticity and online platforms that can provide it. ?There is also a perception that high-end consumers do not shop online and that they are unwilling to make purchases online above a certain price point,? she said. ?For luxury shoppers, as with all Chinese consumers, shopping online is the way they shop.There is some indication that price transparency may actually spur purchase decisions.
?Especially in China, brands emphasized the high touch, in-store luxury shopping experience as an extension of the brand. As opening stores in China is no longer viable, e-commerce allows brands to access wealthy customers throughout the country who don?t have acces...