11 Mar E-commerce: a strategic way out of the coronavirus crisis
Coronavirus is spreading around the world at an alarming rate, causing market disruptions in sectors from retail to tourism. If we talk especially about the luxury fashion market the most optimistic forecast is that the situation will return to normal trading conditions only at the beginning of 2021 (Source: Altagamma/BCG). The virus outbreak already affected 115 countries in the last three months and evidenced global luxury brands’ reliance on Chinese consumption. That’s why many companies are using Tmall as an alternative to remain within the market of the world’s second largest economy.
What is Tmall and why fashion brands should be there?
Tmall is a Chinese e-commerce retail for business-to-consumer (B2C). The website has about over 1 billion products from 180.000 brands, divided into 3.700 categories. On January, LVMH’s KENZO and Richemont’s Cartier officially entered the platform. Data show that in 2019 over 50 luxury brands opened single-brand stores on Tmall and today these online stores have clearly become an indispensable sales channel. In addition, Farfetch, the British luxury e-commerce, who collaborated with the Chinese platform almost two years ago, has just received a $125 million investment from Tencent. Now they may have even greater opportunities to harness the online consumption potential of Chinese.
How to react?
Go online! Italy’s Moncler warns of drop in sales in Chinese physical shopping due the virus crisis. Asia is the brand’s main market and accounts for more than 40% of revenue. A critical business impact since shopper numbers at Moncler stores in China have plunged 80% since the coronavirus outbreak. The fear of contagion by physical contact made people change a little their shopping habits. This shift brought to e-commerce an impressive growth since January 20, when the coronavirus outbreak became a public sanitary emergency. People were stuck at home for days shopping online. According to Le Figaro, Chinese online sales have increased by 300% in volume compared with data until December 2019. In Italy, from 17th to 23rd of January, online shopping grew by 56,8%, as reported by Nielsen.