Shangpin.com, China’s online shopping mall, has developed yet another way to do business: a digital version of shops-in-shop called “e-flagships.”
The first brand to be hosted on the Shangpin platform in this way is Lanvin, and La Perla is next, said M. Claire Chung, Shangpin’s vice president for global business development. WWD reports that the e-flagships are independently run by their brands, but Shangpin lends its expertise with social media and digital marketing to its partners.
“The Chinese online consumers are different from their Western counterparts. Monobrands do not work well in China. Chinese consumers grew up on shopping sites like Tmall, which has many brands. That’s why they prefer the multibrand platform,” Chung said. With brick-and-mortar stores starting to crop up in second-tier cities, Chung believes that true online growth potential exists in third- and fourth-tier cities. She said that Shangpin is already delivering to 400 cities throughout China.
In addition to the new e-flagships, Shangpin still has its traditional full-price, online shopping mall section, for which it stocks its own products – like any brick-and-mortar department store does. Shangpin also has its original flash-sale site, but nowadays its also an education center for consumers to learn about the full-price brands on its sister site.
“Our innovation allows for brands to benefit from our high-end traffic and marketing synergies of all our brand partners. The brand can maintain their own independent branded stores that are separated from the brands in our own multibranded retail area,” said David Zhao, founder and CEO of Shangpin. In a stroke of genius, Zhao worked with China’s banks to market the site as a perk for their high-end credit card customers when founding Shangpin.
But it’s not just the high-rolling clientele that the site is interested in. While the average purchase from third-tier cities is lower, tiers three and four have very loyal customer bases. “We see large purchases coming from those cities and less from tiers one and two as they have more options,” Chung said. She shared an anecdote about how a shopper in a tier-four city once bought the entire Sergio Rossi collection that was available on the site, explaining that when consumers see a brand they like that’s not available to them in town, they tend to buy a lot of what’s available.
Another difference among tiers is the type of purchase being made. Tier one is focused on luxury brands, whereas tiers two and three are interested in designer and contemporary brands. Tier four, Chung said, is interested in both fast fashion and then luxury.
Shangpin has three million users on its full-price site, and five million on its flash-sale site.