This week in the news, Uniqlo opens a store on JD.com, e-tailers are setting up pop-up shops around China, South Korea is becoming even more popular with Chinese tourists, Sandro Paris is expanding in China, and Asia’s AAA generation is driving luxury spending.
China’s largest online direct sales company, JD.com, has announced that fast fashion brand Uniqlo has opened a flagship store on the e-commerce site. Uniqlo will become the first international brand using JD’s services to warehouse its products in JD’s warehouses. The brand will rely completely on JD for logistics, which will allow it to take advantage of JD’s same-day and next-day delivery services. To commemorate the partnership, the online store will feature special Uniqlo t-shirt designes called “Born in China.” Ahead of the official April 17th launch date, JD customers will be able to buy specially discounted Uniqlo products. On the official launch date, customers will be able to buy Uniqlo items from JD’s main site, the company’s apps, and through social media platform Weixin.
Vinux.com, a Beijing-based e-commerce merchant, is one of several businesses setting up small shops in residential areas where customers can buy products online at kiosks and pick up their purchases the next day. Vinux.com recently unveiled its third neighborhood store in the southwestern Chinese city of Chongqing, which has a population of 29 million. The company plans to open thousands of such stores across the country over the next three years. Though China now boasts about 300 million online shoppers, this is only a fraction of the country’s approximately 1.4 billion people. The new approach taken by Vinux.com and other companies aims to acquaint Chinese consumers unfamiliar with the Internet with e-commerce.
According to the China National Tourism Administration, 6.1 million Chinese travelers visited South Korea last year. Figures from travel agency Ctrip also show that South Korea is now the most popular tourism destination for Chinese travelers, beating out Thailand for favorite travel destination for the first time. In fact, Ctrip saw more than 300,000 ticket, hotel, and other bookings for South Korea from Chinese tourists. Ctrip found that group travel is still the most popular way to tour South Korea, accounting for roughly 50 percent of trips, though independent travel to Korea’s top-tier cities has grown strongly. Groups of travelers born in the 1980s accounted for nearly 60 percent of travel, while those born in the 1990s accounted for more than 20 percent.
With 15 stores in China, one of its fastest-growing markets, the brand will add 10 more stores this year. The company opened two stores last month and will open a large flagship store in Hong Kong’s Causeway Bay district later this year. Sandro offers trendy designs at affordable prices — all delivered through a luxury-like customer experience. With most of its stores in Europe, the company has ambitions to become “a global leader in the affordable luxury segment,” according to its founder Evelyne Chétrite. The ready-to-wear brand’s international expansion pursuits got a boost from an investment from American private equity firm KKR in 2013. KKR acquired a 65 percent stake in SMCP Group, the owner of the brand.
Asia’s total number of luxury consumers is expected to reach 1 billion over the next decade. Agility Research & Strategy recently conducted “Affluent Insights” research, which examined luxury spending trends within the top 25 percent of high-income Asian consumers. (For China, “high-income” refers to households that make $29,000 or more annually.) They singled out “Generation AAA” as the future of luxury consumption in Asia. These consumers, which range in age from 18 to 34, are named for “their aspiration for brands that demonstrate who they are, ambitiousness and affluence.”AAAs are Internet savvy; 47 percent purchase products online, and two-thirds research luxury items on the Web before purchasing them.
image credit: mike lau