The top of China’s luxury buyers are now moving away from the country’s expensive stores in Beijing and Shanghai. They prefer to buy their expensive products online – to get a better price deal.
A study by consulting firm KPMG (reported by the Wall Street Journal) reveals that almost three-quarters of 10,200 ‘big spender’ survey respondents said they preferred to shop online because they could land a better deal. 55% said they preferred shopping online because it is less time-consuming. Another 47% said buying online guarantees authentic Western origin of the goods.
Most of the luxury purchases are made on third-party sites like Alibaba-owned Tmall and Taobao. Some luxury brands have indicated they see the high investment costs of building a logistics network for delivery as a deterrent to opening online sales portals. Some companies have entered China’s online luxury market by teaming up with existing Web-based companies. KPMG predicts that more Western brands will build platforms for e-commerce within the next two years.