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International online fashion store launches dedicated Chinese Site
Investing in high fashion in the current economic climate carries equally high risk, and many companies are looking to China's new money as the safest gamble.
While other international markets for luxury goods hesitate and falter, the spending power of the Chinese offers some gratifying support, even rescue, especially when the goods are quickly available and sold at discount online.
Federico Marchetti, founder and CEO of Yoox Group, says China will become one of the group's top three markets in five years. [Photo/China Daily]
So, in what the Internet fashion retailer Yoox hopes will be another timely development, last month it launched its Chinese online store yoox.cn, brimful with confidence.
"China will become one of our top three markets in five years," says Federico Marchetti, founder and CEO of Yoox Group, who was in Beijing to mark the occasion.
Although the market in luxury goods is slowing, he says, the online luxury is unaffected.
Marchetti, a former investment banker, spotted a golden opportunity at the start of the millennium when he founded Yoox as an Internet store to sell overstock by designer labels and unsold items from previous seasons' collections.
When the Milan company went public in 2009, Marchetti thought it the right moment to invest in China. The following year it set up a Chinese Internet service for Emporio Armani, one of the first mono-brand fashion stores in the country's e-commerce.
Yoox then took on the running of other online services for individual designers and fashion houses, such as bally.cn and dolcegabbana.com.cn, all "Powered by Yoox Group".
Now, after two years in which to test the market, the company has launched yoox.cn, a specially tailored version of its international site.
"We have been very pioneering in many aspects for the Chinese customers, and we have waited for two years, as we have to make sure that all our operations, understanding of the market and the service are ready to welcome the flagship brand," Marchetti says.
"We have a very long-term goal here. We are not opportunistic. We are investors in this country because we think it is going to be big."
To begin with, China's Yoox will not have the same range of labels and designers, but they will be at least half price and more readily available.
There are now more than 1,000 brands to choose from on yoox.com, but only about 200 for yoox.cn customers.
"aObviously we cannot start with everything. Season by season, we will bring more and more brands to China," Marchetti says.
More important, he says, is that all the stock for China is in China, and Chinese consumers get next-day delivery.
"This is different from many other players in that they ship internationally in one or two weeks. Inventory means risks, and this is a big thing for a retailer."
It is more complicated to import in China than in other countries, he says, so Yoox decided to localize its operations with an office and logistics center in Shanghai employing 50 Chinese, "because they know the local market better".
"We know better about brands, and this is the trade-off," Marchetti says.