US Luxury Retailer changes eCommerce strategy for China

Jing Zhou Jing Zhou


The century-old US luxury retailer Neiman Marcus launched in China very quietly late last year after investing $28 million in Chinese site Glamour Sales. But this week, in a major change in strategy, Neiman Marcus is closing its warehouse facility in China and scaling back its physical presence in the country.

Neiman Marcus’ Chinese site will remain online and in business, but as a Neiman spokeswoman announced  all orders will be shipped direct from America instead. The representative said this is “a better model” for the luxury retailer, and claimed not to be influenced by a recent slowdown in high-end purchases in China caused in some part by a crackdown on government corruption that makes grand displays of wealth a bad idea.

Despite the difficulties, Neiman Marcus has raised its stake in Glamour Sales at some point in the past year and now holds 44 percent of the luxury e-tailer.

The Neiman Marcus Chinese site – which stocks couture brands like Kate Spade, Helmut Lang, Valentino, and Jimmy Choo – will now ship items directly from the retail chain’s US warehouses. While that will create long shipping times and leave the site subject to currency fluctuations, it might offer some benefits. While Neiman Marcus didn’t outline what those benefits might be, it could mean actually being faster to offer new fashions and product ranges to Chinese consumers, no longer held up by local bureaucracy.

At present, the Chinese site hasn’t been updated to reflect the change in strategy and tells current customer that it ships from its Shanghai warehouse. It’s not clear when the US shipping changeover will happen.

Luxury e-commerce is a huge sector in China, principally covering couture clothing, fine wines, and curated travel.

(Source: Wall Street Journal)

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