Following Burberry, Coach Entered Tmall

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Coach, a fashionable American leather-goods brand known for its signature handbags, plus shoes & accessories, reportedly shut down three of their flagship stores in Hong Kong. Meanwhile, earlier this August, Coach said their mainland China sales grew 9% year-on-year to $595 million in fiscal 2015, but growth in Hong Kong and Macau was much slower.

Chinese tourists have been the main customers of Hong Kong’s luxury retailers, but the stagnant economic growth and the recent RMB devaluation have seriously affected Chinese spend. LadyMax reported that 2014 is the darkest year for many luxury brands – Hugo Boss and Ferragamo have closed 7 and 6 stores respectively ; Zegna shuttered 6 and Burberry shut down 4. This implies the determination of moving to China ecommerce.

Why The Surge to China’s Ecommerce

On September 4th, Coach quietly opened their Tmall flagship store. However this is not the very first time Coach marches to ecommerce. 4 years ago, Coach launched their Tmall shop nonetheless they ended it within a-month operation. Following the trend of (light) luxury brands opening the gates to Tmall, Burberry undoubtedly proves that a Tmall flagship store can prevent fashion knockoffs from flooding online. Last Singles Day, Tmall has showed the whole world that their sales is 3 times more than Black Friday. With local targets’ habit of checking with Tmall first then searching online, Tmall definitely becomes the No. 1 choice for official ecommerce. However, another giant retailer, JD, isn’t preferred by their audiences when it comes to luxury/fashion shopping. Recently, Uniqlo left JD in July, 2015.

“When Coach and Michael Kors both use WeChat for VIP/CRM service to approach target audiences, brand marketers will soon learn the combination of advanced and personal functions on social media and ecommerce access would be most helpful for sales boost in China.”

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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