News of U.S. luxury retailer Neiman Marcus‘s entry into China is hitting all the media outlets. Lots of noise for a company that is quietly testing out the Chinese luxury market.
Neiman Marcus is not making a big splash by opening a flagship store in one of China’s gleaming cities. Rather, it will invest $28 million into the privately-owned Glamour Sales Holding, which operates successful flash sales websites in Asia.
This moves allows Neiman Marcus to tap into China’s booming luxury and e-commerce market with limited risk. They don’t have to worry about finding properties and other logistics.
“We are taking this bold step to establish Neiman Marcus Group as an international brand,” said Karen Katz, CEO and president of The Neiman Marcus Group. “Our strategic investment in Glamour Sales gives us a tremendous partner and a strong foothold in a rapidly expanding luxury market.”
“We have a rich, century-long heritage with two prestigious brands — Neiman Marcus and Bergdorf Goodman. We believe that our vast experience and history of success in luxury and fashion, customer service and e-commerce, combined with Glamour Sales’ keen understanding of the Chinese market, presents us with a unique opportunity to build a vibrant full-price, multi-brand, luxury online business in China,” said Katz.
This deal serves as a spring board to the company’s eventual launch of its own Chinese e-commerce website later this year.
Yet, some believe that a good market entry strategy for China is to open a retail store. According to some industry experts, “Chinese luxury shoppers still prefer the physical experience of shopping in stores, despite the explosion in popularity of sites like Taobao.”