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Jun
2015

Luxury watches make the shopping channels

tanlun

The general business model of TV shopping channels is to sell limited volumes of a product that may or may not be available in a shopping mall, in low limited volumes at very competitive prices. Stock isn’t held and the channel is usually paid before they have to pay the product manufacturer. Its certainly not regarded as a vehicle that would be used by luxury brands; until now.

The poor performance of the luxury watch sector in China in the past 12 months has clearly raised a level of desperation amongst some fashion brands because their products are now being offered on TV shopping channels with very high discounts. Channels in Beijing, Shanghai, Sichuan, Hangzhou and Hunan have been offering watches from fashion and accessory brands Coach, Emporio Armani, Burberry and Versace. As yet the top watch brands have not ventured into this market.

Clearly these brands are not watch manufacturers and sell watches as an extension of their core business, but this is an indication that they or their distributors want to move the stock quickly because perhaps its not selling in the stores. For all these brands there is a risk that they devalue themselves as TV shopping has a very low reputation in China and trust in the products on offer is low. On the upside, many of the presenters are local celebrities whose endorsement may be good for the brand in general.

Products on offer include:

  • Coach: listed at over 3,000 RMB and reduced to 999
  • Versace: List price of 12,650 RMB down to 9,800
  • Emporio Armani: Listed at over 3000 down to 999 RMB
  • Burberry: List price of 5,000 on offer at 1680 RMB
  • Volume is restricted to about 20 – 200 of each model

We contacted one of the TV stations that claimed that all the products are authentic and they were authorised to sell them, however a further call to the brand HQ implied that the channels were not approved and products should be purchased in store. Whether the brand has asked its distributors to sell the products via TV, or whether the distributors are just desperate to clear their stock is not clear, but either way, this is a new approach for these brands to reach a wider consumer audience and make up for lost sales. What it does for their status in the market remains to be seen.


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