Luxury Brands Yet to Fully Embrace Global Ecommerce

Content Manager

While the global B2C ecommerce market is booming, there are luxury brands that have yet to embrace this sales channel, according to a press report by   As a result, growing luxury ecommerce revenues have gone to online and multichannel retailers and flash sales sites.  But as some of the leading luxury brands increasingly establish their own ecommerce presence, the status is seeing a shift.

The shift is seeing more than 10% of luxury consumers making high-end purchases online, generating a high one digit figure in EUR billion of luxury B2C ecommerce sales.  As more luxury shoppers and brands are embracing the benefits of online retail, sales are growing rapidly.

It is estimated that by 2019, the share of B2C ecommerce on total luxury sales could grow by more than half.

The impact of B2C ecommerce on the luxury market is still felt more in advanced economies where the share of the luxury market reaches double-digit figures in some countries such as Germany and UK.  There are emerging markets such as Brazil, China, India and Russia.  These emerging markets are expected to bring the largest share of ecommerce growth.

In these emerging markets, consumers are researching luxury products before making a purchase over the internet more than consumers in mature markets.

Luxury shoppers in emerging markets are embracing mobile and social commerce.  They are making purchases of high-end goods through smartphones and tablets.

Brazil is even ahead of such mobile leaders as South Korea and the U.S.  When it comes to social media engagement, over half of luxury consumers in China and Brazil follow their favorite luxury brands on social networks.  In China, social media is one of the most important channels on information about new luxury products.

Luxury brands have yet to dip their toes into online markets in some emerging countries.  In 2013, only a tiny percent of top luxury brands mentioned the Middle East as their market on their website or translated the site to a language of the region.

Even a smaller share of luxury brands offered shipping to the region, despite the known high demand for high-end goods in the Middle East.  Only one in six top luxury brand websites invested into advanced translation of the online content into Russian and a similar small share offered international shipping to Russia with the majority disregarding the potential of the booming cross-border B2C ecommerce sales there.

Some of the largest international luxury companies have yet to fully tap into the B2C ecommerce potential.  For example, two global leaders LVMH and Richemont have direct ecommerce operations only for some of their brands and offer shipping to a limited number of countries.

Some other major brand players such as Estee Lauder and Luxottica Group report growing revenues in the online segment and are expanding their ecommerce channel gradually.

Major online pure-play and multichannel luxury specialists have been increasing their B2C ecommerce revenues.  For example, YOOX Group which operates multi-brands and powers mono-brand shops of many luxury companies saw an annual growth rate in revenues of over 30% between 2009 and 2013.   Another pure-play multi-brand luxury retailer Net-a-Porter has seen growth of over 50% over the same period.

Another sign of success of online retail is that luxury multichannel retailer Neiman Marcus breached $1 billion in online sales in 2013.

In addition to the growing web presence of luxury brand and online retailers, another group of retailers include the private luxury clubs that offer luxury goods online at discounted prices through flash sales accessible to their members online. Companies include:  Beyond the Rack and Editor’s Closet in North America, Privalia in Latin America, Vente Privee and Amazon Buy Vip in Europe, Reebonz and Glamour Sales in Asia-Pacific and MarkaVIP and Runway [Sale] in the Middle East and Africa.

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