Vip.com, the new frontier of luxury e-commerce

10/07/2019

 

 

Total orders for the full year 2018 have increased by 25% on an annual basis to 335.0 million

 

With China becoming an increasingly rich country, even luxury brands begin to make ample profits. In particular, Vip.com, a leading online discount retailer for brands in China, saw its total active customers increase by 6% compared to the previous year to 29.8 million. Last year, Vipshop generated $ 19.47 billion in GMV from 60.5 million active customers who placed 437.4 million orders overall. Total net revenue reached $ 12.3 billion.

These figures include the total orders for the entire year 2018, which increased by 25% on an annual basis to 335.0 million. The gross profit for the full year 2018, on the other hand, increased by 20% on an annual basis to RMB 18 billion from RMB 16.3 billion the previous year.

 

JD.com and Tencent co-invested $ 863 million in Vipshop last year to counter Alibaba

 

Vipshop, confirming its growth, announced that it has become a sponsor and exclusive Chinese e-commerce partner for London Fashion Week, one of the most influential fashion events in the world. Through this sponsorship and partnership, Vipshop aims to introduce more fashionable and authentic British brands for Chinese consumers through its powerful platform.

JD.com and Tencent co-invested $ 863 million in Vipshop last year to counter Alibaba. This investment gave Tencent a 7% stake and increased JD’s existing participation from 2.5% to 5.5%. Vipshop has launched around 400 million “mini-programs” on Wechat (the best messaging app in China). In addition, it has grouped VIP subscription packages with Tencent Video subscriptions.

 

What kind of products are sold on Vipshop and VIP International?

 

Vipshop still holds a rather small market share of 4.3%, as Tmall and JD dominate the national and general electronic commerce market. VIP International, on the other hand, accounts for just over 15% of the cross-border e-commerce market, just behind Kaola and Tmall Global.

As shown on the Vipshop website, the app works mainly with international and competitive brands in the beauty, cosmetics, clothing and jewelery sectors. Some important brands that work with Vipshop include Calvin Klein, Armani and Tommy Hilfiger, just to name a few.

 

Vipshop is the undisputed leader of “flash sales”

 

Vipshop also caters to consumers in lower-tier Chinese cities. While Alibaba, which has a market capitalization of $ 256 billion, dominates the Chinese e-commerce landscape with its market linking buyers and sellers, Vipshop has carved a small but profitable niche.

Vipshop, which has a market capitalization of $ 11.5 billion, is the undisputed leader of “flash sales”, where it sells branded goods, which mainly include clothing and cosmetics, at a considerable discount compared to what is sold in stores of brick and cement.

 

 

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