New licensing model for luxury goods dealers: The main push "in the quarter + positive price"

U.S. luxury Hundred years old shop Niman Margo Group to China luxury online retail website charm Benefits Investment 28 million U.S. dollars, with the help of E-commerce landing in the mainland market.

In fact, the same luxury retail giants, known as Hong Kong "fashion godmother" even Carver has entered the mainland, but its market plans for "aggressive" repeatedly frustrated, almost left behind the sequelae. While China's luxury goods dealers are under criticism, Niman Margo chose to enter China through the electricity quotient, will this strategy be more successful than even Carver? And with the first-line luxury brands have always been compared to the store model, luxury "integrated retail" in China will encounter what kind of opportunities and challenges?

For China's booming luxury market, Niman Margo, a century-old shop in America's luxury retail industry, will naturally not sit idly by. March 22, the group announced in Shanghai, the Chinese luxury online retail website charm Benefits Investment 28 million U.S. dollars, E-commerce as the first step in China.

Although Chinese consumers know little about it, Niman Margo is a household name in the US and has a godfather position in the luxury retailing industry.

Katz, the group's president and chief executive, told the China Business News: Niman Margo began to consider entering China as early as 1.5, after weighing the decision to test water first by electronic commerce, and in order to differentiate itself from the current pattern of discounting as the main selling point for luxury electric dealers, their products will be "positive" and "quarterly".

"The season + positive price" luxury goods electric business model

Niman Margo's web site is designed to allow consumers to browse the full range of products online without going to a retail store, while buying a product in China is the same price as anywhere else.

In the United States, Niman Margo in the fashion talent and even ordinary consumers are quite popular, its own 42 neimanmarcus and two Bergdorfgoodman department stores. Chanel, LV, Gucci and other top luxury brands are sold in Niman Margo, many "designer brand" also appeared in the mall.

A business person who has lived in the United States for many years and is currently engaged in fashion industry consulting in Shanghai told reporters that Niman Margo is a household name in the United States, deeply from the rich to ordinary people's lives. One of the most talked about is Niman Margo's "Christmas Gift Atlas". In Europe and the United States traditional Christmas gift season, consumers will be in the Niman Margo for men and women in the gift album, looking for family and friends gifts, but in addition to physical stores, people often choose to buy by mail order.

China will soon become the world's largest market for luxury goods, and Niman Margo decided to use E-commerce as the first step toward China in the US using the "Physical shop + mail-order + e-commerce" model. Niman Margo's "non-holding strategic investment", with a total of $28 million trillion, has not been disclosed, and uses mainly in the "Time-limited Sales" section. The so-called "time-limited sales", usually refers to the site in a limited time, a part of the product sold at a low price, for consumers "seconds to kill." The model has been successful in Europe and the US, and it has been introduced into Asia by glamour.

Charm benefits The current business is concentrated in Asia, mainly for limited-time sales and discounts. and Niman Margo plans to launch its own E-commerce site by the end of 2012, unlike the existing model of glamour, whose products are "in season" and "Positive price".

Katz told reporters that Niman Margo's next goal was to build a "multi-brand premium luxury network business" whose web site was designed to allow consumers to browse the full range of products online without going to a retail store and to buy products in China at the same price as elsewhere.

Even Carver's legacy.

Although Liankavo in Hong Kong has become a symbol of identity and status, but due to bear the sales risk of buying goods, not to find out the Chinese market, even Carver, in the first few years of the mainland to eat a big loss.

"Niman Margo is almost the same as even Carver, is the ' big buy hand mode '." Luxseaceo Feng, who is engaged in the luxury retailing industry in Shanghai, told our correspondent.

Perhaps even Carver's experience in mainland China is puzzling, in the view of today's "powerful consumers" who are fanatical about luxury goods. In Hong Kong, even Carver is called "Fashion godmother", many luxury brands converge, by the city's rich and middle-class favored, and its landing on the mainland is repeatedly frustrated.

More than 10 years ago, even Carver opened his first shop in Shanghai, which sounded the Horn of expansion. By the year 2006, however, even Carver had closed stores in Shanghai, Hangzhou and Harbin.

A Hangzhou consumer told reporters, around 2004, in Hangzhou Wulin square Golden lot, even Carver and Hangzhou Yintai isolating, and Hangzhou, the top high-end shopping malls in Hangzhou are not far apart. The strange thing is, the competitor's shop is always surging, and even Carver is empty, occasionally curious passers-by also just far look at the window. Its noble image seemed distant.

Even Carver did not give up on the defeat of the opener. A year after the overall withdrawal from the mainland market, even Carver made a comeback and opened a new store in Beijing's Jinrongjie, but still failed to usher in the expected success.

Feng told reporters, Niman Margo, even the business model of the Carver has touched a lot of human and material resources, and the standard is very high. With some 3,500 people can operate a small integrated shopping malls completely different, the overall operation of the group, the establishment of a strong buying team, and luxury brands, designer Brand signed a distribution contract.

Buying hands plays an important role. A brand may have 200 to 300 products in one season, while the buyer picks out 20 to 30 of them with experience and vision.

This model is very different from the present Chinese mainland. Mainland shopping malls are usually owned by property developers and developers are only responsible for renting out property and collecting rents. The brand needs to rent the store, decorate, hire the clerk, manage the stock.

"After purchasing the purchase, the goods belong to Uniman Margo, Liankavo and so on all the department stores, and the market takes the risk and obtains the sales profit." And Shanghai Henglong, National Gold Center and other shopping malls are only real estate developers, the risk of sales by the brand to bear their own. "Feng said.

Although Liankavo in Hong Kong has become a symbol of identity and status, but due to bear the sales risk of buying goods, not to find out the Chinese market, even Carver, in the first few years of the mainland to eat a big loss.

A luxury retailer in Shanghai told reporters even the time when Carver first entered the mainland was inappropriate, with the exception of a handful of "returnees", most of the Chinese did not know anything about luxury brands and had little knowledge of designer brands, as many of the luxury brands and designer brands in the company of Carver did not have a bit of visibility in mainland China until today, In the eyes of consumers at that time is naturally strange or even strange, and at that time these brands themselves are not much in China to promote awareness.

In addition, even Carver's high-end image becomes a huge pressure. Its storefront scale is very big, even need "tens of square meters", the request to the clerk is extremely high, super large-scale, high-end decoration, high-end sales bring the result is the high cost.

It is not surprising that even Carver is unsustainable because it has long been in a state of high cost and low sales.

Feng that, compared to the same time, even Carver, Niman Margo at this stage of the current entry into China, both advantages and disadvantages. The advantage is that Chinese consumers now know more about luxury goods than ever before, and the time is better, the brand in Niman Margo store has a certain popularity in the eyes of Chinese consumers. But the disadvantage of coming late is also obvious, for example, in Shanghai, Beijing and other luxury goods, land prices have long been high. In Shanghai, many store rents standard is every square metre 50~60 yuan/day, in Nanjing Road, Huaihai Road and so on, rents even can be as high as 100 yuan/day, this undoubtedly to the retailer creates the heavy pressure.

That seems to be why Niman Margo first built a website, not a store.

As for whether to open a physical store, Katz said it has not yet decided which of its two brands. and referring to Niman Margo in the United States physical stores and e-commerce comparison, found that e-commerce growth momentum even more than the physical stores.

"Of course, we have also considered is in China to do direct sales shop or do E-commerce, China's cities more, if you open a direct sales shop to establish warehousing, we first enter the Chinese market to carry out a full range of brand-wide E-commerce platform is better, this is our first step." "said Katz.

The Chinese rule of buying hands

"Big buy hand Mode" fashion luxury department stores in China need to have a smarter and more flexible approach, a small area of many stores in the hearts of consumers to strengthen the impression, and facilitate the transfer of goods, flexible and changeable.

Boston consultants estimate that Chinese consumers bought luxury fashion and accessories at home and abroad last year at around $40 billion trillion, an increase of 33%. LV, Chanel and Gucci are the most sought-after luxury brands in China in the 2011 and are sold in Niman Margo, according to the Bain consultancy.

Industry comments that the Niman Margo into China is, of course, in order to profit from the growing demand for luxury goods by China's consumers, and the advantage of choosing a power provider is not to immediately assume the huge risk of opening a physical store and capital investment.

Buying hands originated in Europe and the United States, while Chinese buyers were deeply influenced by Japan. The daily work of many fashion buyers is to go to the international fashion show, with their eyes, market judgment to buy goods, supply department stores. Department stores first buy the goods bought by the hand, and then retail to consumers, making money from it.

As China's department stores are owned by property developers, property developers only act as "landlords". A number of luxury brands in the shopping malls, either pay the rent at a fixed amount, or deduct the rent by a certain percentage of the sales.

Shopping malls in the various fashion, luxury brands push what product line, sell well, the risk is mainly borne by the brand, shopping malls as long as the rental store, the income is relatively stable.

When the business area of tens of thousands of square meters, even the carver came to China, shopping malls bear all the inventory, become the buyer of the risk of the commitment. At present, although some domestic buyers have overseas or Hong Kong work experience, but they do not know enough about Chinese consumers, the cultural differences in various regions of China is also difficult to touch ripe. Buy hand procurement of clothing style is often too trendy, immature buyers often to the department store to bring a small business risk.

And luxury e-commerce in China has long been no longer virgin land, independent luxury sites in endlessly. Jing-dong and other comprehensive online shopping malls also have luxury channels.

A luxury outlets in the industry to reporters that for Niman Margo, the first to carry out online business may be the future of the physical store test water. Because the entity shop affects the fund is huge, and needs with the real estate business, the luxury brand to straighten out the relations, after all has the card Buddha setback precedent before, more than 100 years did not step out the American Niman Margo to dare rashly to act.

In addition, online business if you can ensure that sourcing, brand licensing way to successfully launch, will be Niman Margo brand to play a very good promotional role, and its ultimate goal may be the entity store.

Feng that the "big buy hand model" of fashion luxury department stores in China need to have a smarter and more flexible approach. With the I of Hong Kong T Group, for example, the size of their stores in the mainland are small, often only 500 square meters, or even 100 square meters. In this way, the cost of opening a shop will be much smaller, the group can be widely distributed point. The impression will be enhanced in the eyes of consumers.

"In Shanghai, Changning District and Pudong New Area, the consumption habits are different, if there are more than one store, you can transfer goods, flexible response." "Feng said.