Authorized big deal

The industry has to rebuild consumers' confidence in online luxury shopping by honest selling and better delivery and after-sales service this year, she adds.

"To run an Internet business you should have an engineer's brain and an artist's heart," Chen says. "Luxury goods need a rich cultural context, luxury shopping environment, express service and after-sales service to go with them."

To assure consumers of the quality of their products, Chen commissions professional short videos for each item, showing their detail from every angle and telling the stories behind them.

"I want consumers to see a wonderful product with rich cultural meaning, instead of just a bag or a suit," he says.

He also chooses high-end express companies for the delivery service, such as FedEx. To improve the after-sales service, last week the company signed a cooperation agreement with Blucci, a local service company specializing in the cleaning and maintenance of luxury leather products.

Consumers of ihaveu.com can now have Blucci's services in 20 branches around China.

Another advantage that online luxury retailers have over traditional shops is the close connection to customers and recognition of their purchasing habits, claims Chen.

"Online luxury retailers are able to study the consumption behavior of China's middle class," he says. "The more they buy on my website, the more we'll understand our consumers' needs.

"Unlike one-off deals in a shopping center, most of our users will make a second or even third purchase."

Chen's company has been authorized by dozens of luxury brands.

He is seeking more, but Huang Yuanpu, an analyst with iResearch, says it will be hard for local companies to get authorizations over the next two years.

"After all, a thing is valued if it is rare," Huang says. "With large volume of luxuries sales online, the price will gradually fall. And Chinese e-commerce companies prefer to use price wars to compete, which will jeopardize the reputation of luxuries. It is not what big brands would like to see."

Huang suggests e-commerce companies may get indirect authorization by purchasing from big department stores, which will ensure the product quality while mitigating legal risks.

Contact the writers at chenyingqun@chinadaily.com.cn and linjingcd@chinadaily.com.cn

(China Daily 02/01/2013 page15)