Luxury E-tailer Shangpin Targets “Untapped” Affluent Chinese Consumers

on November 11 2011 | in Digital Fashion Retail | by | with No Comments


Beijing-based, members-only e-commerce start-up, Shangpin, is cashing in on China’s growing demand for luxury products. Shangpin, whose name comes from the Chinese characters for fashion, taste, and quality, opened in 2010 with 3 employees to offer luxury consumers easy access to the goods they craved but could not buy in person.

The company has scaled quickly largely because it is reaching potential luxury consumers outside of major cities of Beijing and Shanghai who are hungry to improve their lifestyles, but still find it difficult to get designer goods.

“Most luxury brands run brick-and-mortar stores just in tier-one cities such as Beijing and Shanghai,” says David Shi Cheng Zhao, Shangpin’s CEO. The Boston Consulting Group found that 37% of their survey’s respondents in China planned to “trade up” otherwise known as aspirational buyers.

So Zhao began offering authentic shoes, handbags, clothing, lingerie, jewelry, and accessories from the hottest European brands via the web. In its first year of operation, Shangpin’s success exploded, earning $1.56 million in its first four months.  Shangpin now boasts 300 employees.

Shangpin is similar to the popular American websites Gilt Groupe and Vente-Privee, allowing Chinese consumers to buy from limited-time online sales. Shangpin also plans to offer full-price, just-off-the-runway goods similar to the e-commerce site Net-a-Porter. Zhao’s innovations to the typical business model, as well as China’s financial and social landscapes, have molded Shangpin into a one-of-a-kind e-store.

Shangpin is particularly committed to presentation and customer service to drive sales. Purchases from Shangpin receive free two-day FedEx delivery anywhere in China, and arrive in sleek black bags with gold lettering. The company also offers member-exclusive offline shopping and networking events. Shangpin offers customer support twelve hourse a day, seven days a week and plans to expand to twenty-four hour service.

While success has come quickly, there are challenges nonetheless. Even though Shangpin’s customers can afford whatever they want, they oftentimes don’t know what they should want. “Compared to those from around the world, especially luxury shoppers from USA and Europe, Chinese online shoppers need more coaching time in terms of interpreting the culture, the story of luxury and fashion brands, especially for emerging high-end brands,” says Zhao.

To address this issue, Shangpin recently launched an online magazine, full of fashion resources culled from New York and Europe and presented in Mandarin, in the hopes of bringing consumers up to speed on trends. By boosting buyers’ confidence with his magazine, Zhao hopes to boost sales.

photo credit: shangpin

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