Niman Margo 28 million dollars to inject power into China

Le King

China's red-hot consumer market continues to attract foreign giants.

Yesterday, the US high-end retail giant Niman Margo Group, which has been watching the Chinese market for a long while, chose to enter in the form of an online rather than a physical shop model, with 28 million of dollars invested in private e-commerce company Charismatic Hong Kong Holdings Limited (hereinafter "glamour").

The industry believes that the online approach can save costs and avoid complex procedures, but there are also pricing, brand licensing and consumer acceptance challenges.

Entity started virtual into China

Niman Margo Company has a century-old history, its own professional retail store business and direct sales business. Professional retail store business is mainly Neiman Marcus and Bergdorf Goodman two major brand stores, direct sales business includes Neiman Marcus, Bergdorf Goodman and Horchow three major brands of mail order and online marketing. Givenchy, DIOR, COCO CHANEL, D&g, Gucci and other front-line brands are sold in their stores.

Niman Margo said the investment was used to promote the growth of the existing limited-time sales in Asia and to establish a new brand of E-commerce business. Two companies will integrate the existing workforce and form a new team to take charge of the development, establishment and management of the new website. Through glamour, Niman Margo will launch an E-commerce site by the end of 2012.

Niman Margo, the president and chief executive of Karen Katz, told the first financial daily that if a physical store was to be built in China, it would be the fastest and most appropriate for Niman Margo group to enter the Chinese market online. And according to the U.S. market, online shopping performance is very good, and China's online shopping market potential is very large.

Charm benefits revealed that its future will be online sales Niman Margo to provide all kinds of luxury goods, warehousing in China is responsible for the charm, distribution by the third party logistics. The Niman Margo Group said the price would be flat with international market prices.

Four challenges

"It is already very difficult to locate popular shopping areas in China's first-tier cities, and if it is a physical store, you need a very high warehousing and store costs, and the physical store approval procedures are more complex, the process is very long, so Niman Margo choose to enter the Chinese market online shopping can understand, but they do is luxury, The purchase of luxury goods by the Chinese market is not very successful. Zishaoxia, director of Shanghai Business Economics Research Center.

The first is the brand challenge. Many international front-line big-name brands do not like to sell goods online because they are priced far higher in China than in Europe and the United States, if online sales will pull down their positioning. So Niman Margo's ability to negotiate online sales in China is a big challenge.

The second is how much the pricing advantage is. According to the charm of the benefits revealed that its current to buy hands and authorized cooperation system to obtain some high-end brand merchandise online sales rights, the lowest price to 40 percent-50 percent, which will be the lure of the net buyers. This Niman Margo is expected to be online prices and the European and American store prices flat, which is compared with purchasing and low-cost online shopping is not very price advantage.

"There is also a problem, namely after-sales service, Chinese consumers for valuables need good after-sales service, online purchase a lot of things are lack of after-sales service, so this is Niman Margo to consider in the future." "Zishaoxia points out.

In addition, according to a survey published by the World Luxury Society, nearly 60% of respondents were unwilling to buy more than 5000 yuan on the internet. "Chinese consumers to buy luxury goods or like the physical store experience, after all, see touch, network photos how much and the kind of difference." "Zishaoxia said.