Burberry officially launches Tmall flagship store on Apr 23 2014. This is the first time that an international Luxury brand enters into the third-party online shopping platform, which is some quite surprising.
According to its recent sales report of the website, its flagship store on Tmall sold only 132 products in 18 days, including 32 unconditionally returned ones, a high refund rate of 26.4% comparing to the average refund rate of 7.21% of similar products on Tmall.
Previously, Xiu.com and Jingdong mall also sold outdated Burberry bags windbreakers and other products at special offer, but they did not obtain the official authorization or recognition of Burberry. Apart from Burberry company’s official website, the Tmall flagship store is the only sales channel that has been authorized and recognized by Burberry.
Burberry’ commodities can be classified as 3 categories: men’s, women’s and coat, and sub-categories for each. For example, its women’s products include coats, bags, sweaters, scarves, accessories, dresses, make-up, watches, fragrance and so on.
The products sold on the website is the same as those on its official website, and almost all of them are seasonal new arrivals. And the prices are also the same. Burberry’s flagship store on Tmall guarantees that if the purchased goods are in original state and not used, Burberry can provide free return service within 15 days from the date of delivery of the product. However, items purchased from Burberry’s official flagship store on Tmall cannot be returned to its retail stores.
Compared with Burberry’s official website, the information of its flagship store on Tmall such as sales, return and exchange, reivews and other information are open to the public. According to information displayed on the website, it had more than 300 SKUs, and had sold 132 commodities in 18 days, most of which are fragrances priced between 300 to 500 yuan, followed by clothes priced between 2000 to 3000 yuan, such as Polo shirts, jeans and trousers.
It can be seen from the information displayed on the website, the most expensive product that has been sold is a designer leather wallet, priced at 4,200 yuan. And there is no sales record of any coat or bags that are priced at 8,000 yuan.
A yellow diamond-level (one of many Taobao/Tmall ranks for online buyers) buyer makes an anonymous comment: “The packaging is very good, the pants fit perfectly. My size often need to book from the counter, the online shopping saves me a lot of trouble.”
A netizen from Beijing buys a product as a birth gift for his friend, “The perfume I bought from Tmall flagship store is certainly a certified perfume, it is much faster than get the fragrance delivered from the UK than the official website, it only takes three days for me to get it, it is quite convenient.”
Although Burberry flagship store gets high review ratings in the “product match with item description”, “service of the seller” and “seller delivery speed” with average score of 4.9, 4.8, 4.9 respectively, it is higher than the average score of 60%, indicating that it delivered good user experience.
But its “refund rate in the nearest 30 days” makes people feel eye-popping: the number of returns is 32 times, with a refund rate of 26.4%, it is much higher than the average of 7.21%, and it gets 3 complaints.
The high refund rate could be caused by three reasons:
- The high unit price of products make customers more demanding and easier for them to feel dissatisfied
- It is normal if the size of clothes does not meet the size description, making clothes not suitable, so the return probability is high
- Some customers might purchase more than one items of the same product but with different colors, who would return the undesirable, so that they could take advantage of the free return service
Buying Directly in China v.s. Buying from Overseas Merchants
Luxury products sold at overseas purchasing store is often at least 30% cheaper than that sold in the luxury brand’s official Tmall store. For example, a classic Burberry plaid tote bag is priced at 8,250 yuan at Tmall flagship store, but it only costs 5,600 yuan in a French purchasing store. Despite that it is difficult to distinguish the genuine from the fake ones, but some buyers are willing to try and buy.
Many oversea Chinese, with their connections in China, can easily open oversea purchasing service store on Taobao, making profit from the big price differences between retail prices in China and the oversea ones. This is very common for luxury products, skin care and premium products in China.
At the time of writing this post, I can no longer find Burberry’s Tmall flagship store. It’s easier to blame Taobao for not being the right platform for luxury products than developing the appropriate business, product and marketing strategy for Tmall operations.
The lack of strategy and planning is why Burberry did not perform well on Tmall. I will follow up with another post on whether international brands should sell their product on Tmall or through their own official website.
Update (8 Jul 2014): Burberry has re-launched its flagship store, indicating “upgraded” version. Taobao and Tmall displays total number of sales for each product item but this “upgraded version” has those numbers blocked:
