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Luxury, Asia

He Wei
Tuesday, Apr 29, 2014

Luxury, Asia

Luxury brand Burberry goes virtual in China

China Daily/ANN | He Wei | Tuesday, Apr 29, 2014

United Kingdom-based luxury brand Burberry Group Plc has opened a virtual store on China's largest online shopping platform Tmall, as it forges ahead with its presence in the country.

This is not the first attempt by high-end brands to tap China's 1.84 trillion yuan (S$370 billion) e-commerce market, but whether such a strategy will bear fruit in the long term remains a question.

"Burberry's entry into Tmall allows buyers to seek luxury brands at home," according to a Tmall statement on the tie-up on its official micro blog.

The move reflects "a shared commitment to offering Chinese consumers the best in luxury experiences across all of Alibaba Group Holding Ltd's platforms," said a statement by Burberry.

Running 78 stores in 36 cities across the country, Burberry has taken a bold step in embracing e-commerce.

At its opening last Thursday, the Tmall Burberry store offered a wide array of items from a wool scarf priced at 4,000 yuan to a trench coat called Heritage, priced at 17,500 yuan. Tmall declined to disclose sales figures ahead of the imminent initial public offering of its parent, Alibaba.

Tmall president Wang Yulei said the site was "very open to fashionable brands coming onboard".

He noted that many consumers had already bought luxury goods over the site through resellers, indicating an upsurge in demand for such products.

"It's all about access. Being on Tmall gives Burberry access to Tmall's base of 400 million users," said Kevin Gentle, digital strategy director of Labbrand Enterprise Management Consulting (Shanghai) Co Ltd.

Apart from market penetration, the collaboration also helps Burberry to better oversee its brand in China, as many of its good are sold via the "gray market", an unidentified source told the Wall Street Journal.

According to consultancy Bain & Co, nearly 60 per cent of consumers have made at least some luxury purchases through parallel channels such as buyer agencies and websites rather than from original brands or department stores.

Burberry's move followed a similar one by United States-based bag maker Coach Inc, which unveiled its Tmall store in a bid to fight against fake or unauthorized products.

Coach set up a special team to check the authenticity of Coach-labelled products sold on Tmall and Taobao, its sister platform that houses tens of thousands of mom-and-pop vendors, the company's China chief Jonathan Seliger told China Daily in an earlier interview. But it pulled the service after just one month, attributing the move to "a celebration of its 70-year anniversary".

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