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Jun
2014

The business model dilemma

While the Chinese luxury industry continues to expand year on year, independent luxury online shopping websites are falling by the wayside, demonstrating that the challenges of the luxury e-commerce sector are not specifically a problem of the market capacity, but a problem with the business model.

It is said that the roots of luxury e-commerce originate from Gilt, the US luxury online shopping website. In the early stages, Gilt with its ‘membership + discount + luxury brands selling’ business model achieved great success. But the growth of the Gilt has a specific historical background. Gilt was first established when the financial crisis broke out and luxury brands were holding high levels of inventory. As a vehicle to help brands clear their inventory and solve the supply problem was a key success factor for the site. But after that period the business of the site has been in decline…

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