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Are independent luxury e-commerce sites truly a workable proposition in China?

When the industry was optimistic about luxury e-commerce in China in 2011, a number of investment organisations held the opinion that ‘luxury items are not very suitable for selling online’. Three years have passed, and most of the flourishing online luxury shopping websites have now closed or been repositioned. At the end of May, the closure of VIP was just further evidence to support the previous view.

As many observers and analysts including ourselves have noted that there is no authorisation for online sales in China from genuine foreign luxury brands. Any authorisation e-commerce websites have received is generally from premium/ mass-market foreign brands that claim to be luxury when selling into China.

When assessing the market, we can summarise what luxury e-commerce companies do in China is to act in a similar manner to that of a Daigou (grey market seller) …

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