Partnership Between Global Brands and Professional Luxury Goods E-retailer Revolutionizes Brand Marketing

By Vipstore Technologies Limited, PRNE
Wednesday, May 25, 2011

BEIJING, May 26, 2011 -

Recently, the industry has been all abuzz with the news that
international luxury goods brands are partnering with, a
high-end fashion e-commerce platform, to enter the Chinese luxury goods
market. Almost overnight, Chinese luxury goods e-commerce leading company
VIPStore has become the focus of the entire industry's attention.

According to experts' statistics, China's luxury goods market was worth
RMB15.6 billion in 2010, and has an annual growth rate of 30%. China has
already become the world's second-largest market for luxury goods. Experts
predict that in the next two years, sales of luxury goods in China's
e-commerce sector will reach RMB20 billion. The age of e-commerce of luxury
goods in China is only just beginning.

Six months versus six days: the weaknesses of the traditional sales model
versus the strengths of the e-commerce model

It takes six months at minimum to open one luxury goods specialty store,
and only six days to establish an online brand retail space through
cooperation with a professional luxury goods e-commerce platform. A study
conducted by the British Luxury Association revealed that in 2008, no more
than 30% of luxury goods brands around the world had online retail
operations, and today, almost all luxury goods brands are eager to break into
the online retail market. A wide range of luxury brands have each displayed
their own unique strengths when it comes to quickly securing market share in
China's rapidly growing e-commerce market and establishing a presence as a
provider of luxury products in the country. At present, many luxury brands
have already come to China to test out the waters of online retailing.
Notable examples include the Giorgio Armani sub-brand Emporio Armani, which
has officially opened its online store in China, and Gucci, whose online
flagship store has already made waves.

The reason why e-commerce has captured the attention of international
luxury brands is not hard to divine. Industry insiders believe that given the
rapid rise in the consumption of luxury goods in China, the setup of
traditional stores limits market share and inhibits companies from seizing
opportunities in the midst of competition. Especially for brands that are new
to China, it's important to find a way to quickly enter the market, and
e-commerce is undoubtedly the best route. Taking into account the high costs
associated with opening a real store, the expense of maintaining the
location, slotting fees, holiday fees, and agent fees, the cost of online
retail operations is much lower than the costs of operating a real store, and
furthermore, real stores cannot compete with online retail operations in
terms of the rapid rate at which the scale of operations can grow.

Speed is the key to success for luxury goods brands. Especially for
brands that are new in the China market, it's necessary to find a way to
enter the market quickly; therefore, partnering with a Chinese professional
luxury goods e-commerce platform is undoubtedly the best choice. Recently,
top global brands such as BCBG and Nicole Lee have chosen as
their exclusive online retailer in China for their full product lines.
Chinese customers have responded enthusiastically, and the companies' brand
awareness in China and product sales have risen rapidly. This cooperation
model can serve as an example for other luxury brand retailers.

Luxury goods brands focus on developing the China market, partner with a
professional luxury goods e-commerce platform

Take BCBG as a case study: BCBG, a company that recently entered into a
partnership with VIPStore, had already been in the Chinese market for several
years, but had only opened a few stores in the mainland. Once the company
joined forces with VIPStore and began to implement sales strategies of
high-discount, limited-time offers, the company realized sales in just two
weeks that a traditional store would require a month to generate, and the
company continues to maintain its rapid growth momentum.

As China's largest high-end fashion e-commerce platform,
leverages the competitive strength of the Chinese-innovated "limited-time
offer" business model in its operations. The website's membership already
exceeds one million, monthly sales figures have long exceeded ten million,
and the monthly sales growth rate continues to exceed 35%. The website is a
leader in China's luxury brand e-commerce sector, and its professional system
for marketing and service for the company's luxury goods e-commerce platform,
its rapid growth and numerous accomplishments, and its professional
international supply chain team are some of the many reasons that numerous
brands choose VIPStore.

Analysts have concluded that as the feasibility of partnerships between
global brand companies and professional luxury goods online retailers
continues to be proven, it will cause the pace of competition to pick up in
China. Whoever succeeds in establishing e-commerce channels for consumer
goods in China will then be able to obtain market share in the terminal
luxury goods consumption market, and therefore will win over Chinese

The recent round of competition among luxury brand retailers set off by
China's largest high-end fashion e-commerce platform will only
intensify. Persons familiar with the matter predicted that five years from
now, online sales of luxury goods will have grown by 30% to USD4 or 5
billion. As the age of online retailing of luxury goods in China dawns,
e-commerce is changing the way that luxury goods brands compete in the
Chinese market. It is clear that in the not-so-distant future, a professional
luxury goods e-commerce platform will become the inevitable battleground of
luxury goods brands.

Candy Bu at +86-10-8562-1330 x808 or candy.bu at

will not be displayed