By shopping in the country’s parallel market, consumers are essentially buying high-end items at steep discounts from overseas. — Bloomberg
SHANGHAI: China’s grey market, where brand new, authentic products are sold at steep discounts, is increasingly dwarfing some global luxury giants’ official sales channels in the country’s dominant e-Commerce space, according to a new report.
For high-end outdoor wear labels Moncler and Canada Goose, sales for some of their most popular products were 2.5 to 15 times higher on Dewu – China’s largest grey market platform – than in their official stores on e-Commerce platform Tmall during the peak shopping season from October to March, data consultancy Re-Hub said in a report released on Tuesday.
Dewu’s growing popularity is weighing on the share prices of powerhouses from LVMH to Kering SA, which have seen their profit margins squeezed by the trend.
By shopping in the country’s parallel market, consumers are essentially buying high-end items at steep discounts from overseas, bypassing the domestic channels that brands have invested heavily in building and maintaining.
Luxury jewellery makers Cartier and Van Cleef & Arpels also saw as much as 6.8 times more sales on Dewu than on Tmall, owned by Alibaba Group Holding Ltd, in the first half of this year, according to the report. — Bloomberg
