Warc, 29 July 2014
BEIJING: Milan, New York and Paris are in line to host new stores catering for Chinese tourists after Secoo, China's largest luxury e-commerce firm, announced it has raised $100m investment to expand its foothold into Western markets.
It already has a series of shops in major Asian cities and the new financing, led by China-based CMC Capital Partners, will also help it to increase marketing spend and fund development of IT infrastructure, the company said.
Secoo CEO Li Rixue said: "The funds will mainly be used in our global strategic layout and overseas business expansions, as well as higher budget in marketing, developing its information technology infrastructure."
"In the future, we will try our best to meet the demands of high-end clients, both in mainland China and abroad, providing them with authentic, seasonal, and desirable luxury products," he added.
Founded in 2008, Secoo currently has over 3m high-end online customers, who spend an average 8,000 yuan (US$1,290) on luxury products, Internet Retailer reported.
Most of its customers are Chinese, or Chinese travelling abroad, and its "offline" stores – such as those planned for Western cities – "work as showrooms and places for high-end consumers to socialise," Li Rixue said.
The development comes as LVMH, the largest luxury company in the world, announced at the end of last week that it has seen a drop in demand from mainland Chinese shoppers as well as a slowdown in Hong Kong, where pro-democracy protests have deterred Chinese visitors, Reuters reported.
LVMH's overall sales growth was a worse-than-expected 3% in Q2 2014 while its operating profit in the first half fell to 18% from 19.8% last year.
Data sourced from Secoo, Internet Retailer, Reuters; additional content by Warc