Capital Operation In Luxury Peak

Capital's pursuit of new luxury goods sales has reached a new stage.

In August 1st, Zhao Shicheng, CEO, disclosed a new round of $50 million financing on micro-blog.

Prior to this, the luxury goods business in the same place, Jiapin network, the only product of the $50 million new round.

According to Bain (Bain & Co.) report on China's luxury market in 2010, sales of luxury goods in China increased by nearly 20% in 2010, reaching 10 billion 700 million US dollars. It has become the second largest country in the world's luxury consumption, and will replace Japan in the world's top luxury consumption in 2012.

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The expansion of consumption and the demand for hierarchy have spawned the combination of electricity providers and luxury goods, which is booming in China.

According to incomplete statistics, more than ten million dollars have been injected into the luxury electric business website, which has reached as many as five. Where will the luxury electric business go in the future? What kind of reward will the pursuit of capital get?

Electric business is hot

Jiapin and Shang pin networks, which have just been online for less than two years, have won three rounds of financing including Angel wheels, and the excellent public network with less than one year has also been favored by IDG. The amount of financing is up to 11 million US dollars.

Since the economic crisis, sales of luxury goods in Europe and the United States have dropped significantly, but in China, it has achieved two digit growth.

Since May 2011, second-hand handbag retailers Milan station and Italy luxury brand Prada have landed in Hongkong.

"Luxury shopping website is running well now. There are tens of millions of dollars a month, and it is not profitable yet.

EV/S (Valuation / revenue) invested in these websites last year was about 2 times higher than this year.

A senior investor in the consumer industry investment circle said that the main reason for the hot investment in luxury business is the lack of specialization in the sales channels of luxury goods.

You can sell luxuries if you can sell things.

Without systematic and regular training, the user experience in the store is very poor. "

He said.

Chen Liang, vice president and co founder of Taishan angel investment, believes that the slow development of the offline channels has created the conditions for the rise of the electricity supplier. "There are many" big guys "such as Messi's department store Macy 's, Nodes Tron (Nordstrom), and BLOOMIN DELL department store (Bloomingdale' s) in the offline channels of American luxury goods, such as Messi already has more than 800 stores, which is unmatched by Chinese department stores including Shinkong world.

Chen Liang said.

Chen Liang pointed out that China's department stores have their own control over the supply of luxury goods, which is not enough in terms of high grade and scale. With the uncertainty of domestic commercial real estate, the development of luxury goods line is slow.

"Luxury goods providers have a high level of talent and information, and are easy to scale quickly under the help of capital."

Chen Liang is confident in his investment direction.

It is not only investment circles that are doubtful about the offline channels of luxury goods in China. A senior resident in the luxury industry who lives in Europe also said that before 2008, luxury brands had to find partners in China when they wanted to open stores in China, and domestic partners often could not take the brand image of centuries as a brand name.

After the liberalization of policies, most luxury brands tend to open their own businesses.

The development bottleneck of offline channels has become an important opportunity for the development of luxury electric business. After the business mode of discounted luxury goods sold in Europe and America, the imitated followers and the capital behind them are coming.

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Different luxury

"Tariff adjustment is not a problem at all. Chinese consumers often pay more for a new product or limited edition bag, car and name list. They just want to get it as soon as possible."

A senior researcher in the luxury goods industry described such madness.

Of course, most consumers' luxury purchases are still rational.

Over the past two years, between offshore and Hongkong markets and domestic prices, offshore shopping has become a trend.

According to Bain's report, China's consumption of luxury goods rose slightly in 2009 than in 2008, but the proportion of total luxuries consumption is still less than 50%.

Gift consumption contributes greatly to China's luxury consumption.

"Shopping at famous stores in China will always encounter strange customers buying things, for example, a few middle-aged men will buy several LV ladies' bags," a luxury senior consumer was puzzled.

Ouyang Kun, chief representative of the World Luxury Association in China, pointed out that domestic luxury gift consumption has become a "symbol of identity and value".

At the same time, "officials are not easy to purchase luxury goods, nor is it convenient for them to appear in luxury goods places. It is inevitable that they rely on corporate gifts."

Younger consumption is also one of the characteristics of the Chinese market. Many young people from the 1980s and post-90s are spending luxuries.

"Chinese parents like to take care of their children, so they can not immediately say that their parents will not care about their children at the age of 18.

But in Europe, a more than 20 year old child manages everything by himself, not asking his parents for money, and his parents do not feel that they need to help their children, "said the European luxury specialist.

In China, who are the people who spend their luxuries on their own income? The McKinsey report defines families with an annual income of 100 thousand yuan to 200 thousand yuan as the upper middle class, and 13 million of the families with such income. In 2010, these families contributed only 12% to China's luxury consumption.

The income of such families in the field of luxury goods will be concentrated in the field of luxury goods such as handbags, clothing and so on. Luxury, yacht and private aircraft, which are known as "hard and luxurious" areas, will only be consumed by the rich class.

But Ouyang Kun pointed out that the consumption of hard luxury goods still has many restrictions in the domestic policy and industry, such as low altitude regulation affecting private aircraft travel, and poor offshore environment, resulting in low utilization rate of yachts.

"At present, luxury goods giants in the world are focusing on emerging markets such as China and Brazil," said a senior member of the luxury industry in Europe.

Since there are no influential luxury brands in mainland China, the positioning of luxury goods in China is different from that in Europe and America. Some brands in Europe and the United States are only high-end premium brand brands.

"Some foreign three line brands are seen as second tier in China, and new models give them the opportunity to relocate in emerging markets, which is also our opportunity."

Chen Liang said.

"Brand will be pferred from first tier cities to two or three tier cities, and even to rural areas."

Ouyang Kun pointed out that the growth trend of luxury consumption in China will continue because of economic development and information pmission between urban areas.

The above luxury luxury experts pointed out that the luxury brands that are now entering China are very few, "30%".

Luxury brand stores are hard to get to the front line and beyond the provincial capital cities. So luxury brands are not facing many brands competition in China, and they always have strong attraction for cities that are not yet storefront.

Supply chain weakness

Several luxury electric business companies get tens of millions of dollars in financing, which shows that venture capital's confidence in the combination of luxury goods and electricity providers has also made the luxury sector and investment circles start to pay attention to the future of luxury electric business.

"When I was studying in France, I found this website, mainly for overseas students, and if the price is high, I still want to go to the store."

A senior luxury consumer who had studied in Europe said.

A domestic luxury industry veteran also pointed out that the purchase of large quantities of goods online consumers will still have concerns, "thousands of things can also be, if tens of thousands of dollars, why online adventure?"

The website of the front desk is easy to operate, and the background from purchasing channels to warehousing and logistics is the core value of luxury electric business.

"The current luxury electric business is not able to attract the quantity of goods purchased. Only a good pattern has only one or two pieces of goods. It is very difficult to buy a favorite choice on such a purchasing website."

A concern of luxury investment providers said.

"Because Taishan's LP is an investor in Buy-VIP, we have a lot of cooperation with Buy-VIP. At the beginning, we were selling Buy-VIP stock, and one of our partners had a family factory, and there was a source of supply in North America."

Jiapin net CEO Yang Peifeng explains the supply of goods at the beginning of the business.

Yang Peifeng said, at the earliest time, the website was small in scale, and there were all channels. Oteri J, distributors, agents, and so on, then gradually shifted to direct cooperation with the total generation or brand.

Although the future of luxury electric business is very good, but Chen Liang also frankly said, "to do luxury online platform is very difficult."

He said that purchasing luxury goods is different from what they do own clothing brands or on the Internet platform. The biggest barrier is "brand is foreign, and a good source of goods is also foreign."

Those who are concerned about luxury electronics providers say that the supply channel of luxury electric providers is still in a stage of tension and need to be explored. He also pointed out that "in order to attract venture capital early, the way of losing money may make water look attractive."

If we carefully observe these luxury online platforms, we seldom see many international top brands such as Herm s, Chanel (Chanel), LV (Louis Weedon) and so on. "Although entering the interface is very attractive, but when we go in, the appearance of good looks is basically sold out."

A white-collar consumer who frequented luxury electric business said.

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According to Yang Peifeng, Jiapin net has more than 1000 brands that have been sold, 20% of which are currently in cooperation, and the hope is to increase to 40%-50% in the future.

The cooperation of international brands with high value has not been discussed yet.

"I think they are very difficult, the first-line brands abroad are very conservative, they are very serious about their brands, even if they want to do business, they will also open their own stores," the veteran travelers from Europe luxury industry expressed concern about the cooperation between domestic electricity providers and the first tier brands.

At present, most luxury electric providers are doing discount products, positioning the feeling to people is "big end."

A veteran who has studied the luxury goods industry for many years pointed out that the first problem faced by all electric providers is that the brand is not authorized, either through buying or purchasing, or through wholesale of outlets.

"Brand itself is not aware of the structural relationships of these people on these websites. They do not have direct communication, or even do not know each other."

Judging from the current market, the luxury electric business has cut the selling point of "brand + discount". For the white-collar workers in the office and other people who have just had economic strength and have certain luxury purchasing power, the market segmentation is accurate.

However, after purchasing, purchasing, etc., after all, the management cost is high and the supply is risky.

At present, such an unauthorized mode can easily lead luxury brands to regard electricity providers as a competitive channel.

For the relationship with the brand, Chen Liang said that the sense of brand that the well done luxury electric business brings to the brand is to maintain the brand image, "the quality of the channel is very important".

He pointed out that the future direction is to cooperate with the brand in depth, be authorized, and even make the supply line with the brand.