21st Century Business Herald, by Tang Xunfang

"80% of Herm¨¨s products purchased online are counterfeit." In late June, Herm¨¨s CEO Patrick Thomas said this in an interview with foreign media, which slapped many luxury websites in the face.

In fact, before the Herm¨¨s CEO, many luxury companies had already launched attacks on Chinese e-commerce websites. At the end of 2011, Dangdang.com was exposed for selling fake Tissot watches. Later, Tissot said that it would not provide any warranty for Tissot products sold through online shopping channels.

In March this year, Swarovski announced that it has not authorized any website in China to sell Swarovski products. ¡±

Since then, many luxury brands such as LV, Gucci, and Prada have also stated that they have no authorized e-commerce channels for sales.

In addition to clothing, cosmetics e-commerce websites that gather international big names have also been suspected of "fakes". In mid-June, it was reported that 90% of Jumei's goods were fakes. On July 13, Jumei CEO Chen Ou denied it in an interview with our reporter, "There are no fakes on Jumei. Currently, L'Oreal and Cetaphil have established official flagship stores on Jumei. If Jumei sells fakes, how can these authentic Chinese brands come to Jumei to open stores? ¡±

Luxury e-commerce websites are difficult to distinguish between the real and the fake.

Most of the products are fake with a discount of 30% or less

¡°Top fashion luxury goods on sale, as low as 10% off¡±, ¡°Fashion cosmetics on sale, as low as 10% off¡±. . . . These tempting advertisements always make users who like luxury goods unable to resist buying.

China is becoming an emerging luxury consumption power, and operating luxury e-commerce has become a hot business. Professional luxury websites include Youzhong, Jiapin, Fifth Avenue, Huha.com, Zouxiu, etc., brand discount stores such as Vipshop and Jushang, Secoo specializing in second-hand brand transactions, Jumei, Lefeng, and Zun Shang engaged in cosmetics, and large portals and professional B2Cs have also opened luxury channels. According to incomplete statistics, there are no less than 30 websites in China that have entered the luxury goods sub-industry in different modes.

This does not include the C2C ant army on Taobao Global Shopping. Data from Taobao shows that Taobao Global Shopping is growing at a rate of 100% per year. , this year's scale will exceed 20 billion yuan, and it has become the main channel for Chinese consumers to shop for luxury goods online.

Fake complaints are a major criticism of luxury websites, and how to distinguish between the real and the fake makes ordinary users helpless.

Recently, Lefeng.com released a white paper on cosmetics e-commerce, which led to a fierce conflict between the company and its rival Jumei. The report said that 70% off the counter price is about the lower limit of the low price of genuine cosmetics e-commerce. Jumei's products are often as low as 50% or even 30% off.

A person who used to work in the cosmetics e-commerce industry revealed to reporters: Generally speaking, if the price of cosmetics is 70% to 80% of the Chinese counter price, it is generally genuine; and if the price is 50% to 70% of the regular price, it may be a mixture of genuine and fake goods. Goods sold at less than 50% are basically fakes, and goods sold at less than 30% cannot be genuine.

Jumei founder Chen Ou explained: "Jumei's Chinese cosmetics shipments are large, and the discounts it gets are the lowest in the industry. Generally, when buying from first-tier agents, the discount for offline brands is about 30%, while the discount rate for online cosmetic brands is higher, usually about 50%. ¡±

Compared with cosmetics, the ¡°lower limit¡± of international brand bags is more diverse. In the three directly-operated global stores of Herm¨¨s, LV, and Channel, goods are generally not discounted. Not only that, these big brands often engage in hunger marketing. For example, Herm¨¨s¡¯ IT bags are not only not discounted, but you have to wait in line for a year before you can buy them.

¡°Unlike clothes that need to be discounted quickly when they are out of season, bags can be sold all year round, so the possibility of discounts in the same year is very small. Generally, they will be discounted after 1 year. "A person engaged in Internet investment in the United States told reporters that those "out-of-season" bags sold in outlets abroad often have defects such as scratches and open threads, and the discount is about 40%. In addition, Coach, which has lower prices, will specially produce some products to sell in outlets. Naturally, the discount cannot be as low as 30% to 40%, but "new models" are sold at 20% to 10% off, or even no discount.

Lei Zhonghui, a partner of Qiyuan Capital who once participated in the investment of luxury goods websites, told reporters that for new luxury goods, especially top-level brand bags and watches, the price of e-commerce channels is more than 20% off the offline price, so the probability of genuine goods is higher; if the discount rate is less than 30%, it is either a fake or a defective "out-of-season" product; and if it is less than 50%, the probability of fakes is relatively high.

According to the reporter, experienced e-commerce luxury goods e-commerce often serve different dishes to different customers. "The probability of receiving fakes varies with different delivery addresses. "The above-mentioned cosmetics e-commerce insider told reporters that the probability of consumers in second- and third-tier cities receiving counterfeit goods is higher than that in first-tier cities, the probability of consumers in suburbs receiving counterfeit goods is higher than that in urban areas, and the probability of consumers in residential addresses receiving counterfeit goods is higher than that in office addresses. High-end people are also less likely to receive counterfeit goods than low-end people.

This approach can achieve the goal of "passing off fakes as genuine" and finding the best between risks and benefits. Because e-commerce websites sell counterfeit goods to relatively "weak" users, these people have relatively little say in the online shopping market.

The smuggler model limits scale

The regular sources of goods for Chinese luxury goods online shopping come from the following channels: Outlets discount malls in various countries, brand retail stores, purchasing from brand agents outside China, and purchasing directly from brand owners.

"60% of the goods on Chinese luxury goods websites are out-of-season goods imported through Chinese trading companies. "Li Chengdong, a senior e-commerce analyst, told reporters.

According to the "Taxable Price List of Articles Entering the People's Republic of China", the tax rate for cosmetics such as eye cream, mascara, face cream, lotion, etc. is 50%, the tax rate for high-end watches over 10,000 yuan is 30%, and the tax rate for luxury luggage is 30%. This directly leads to a huge price difference between luxury goods in China and abroad.

According to a person engaged in Internet investment in the United States, the price of cosmetics abroad is generally 25% off the price in China. The price of big-name bags abroad is generally about 30% off the price in China. The price difference of some brands is large. For example, the price of Coach bags in China and abroad can be several times higher. A bag that sells for about 200 US dollars in the United States, The selling price in China is 3,000 to 4,000 yuan.

In the face of huge profits, online purchasing agents, a "desperate" profession with certain legal risks, came into being. A large number of buyers buy luxury goods overseas, and then global forwarding companies deliver them to Hong Kong in the form of small packages. Water passengers bring them from Hong Kong to Shenzhen and then send them to China. Throughout the whole process, high tariffs can be "escaped" with less "logistics fees" and "purchasing fees."

"Whether it is from outlets or specialty stores, many products purchased online are basically exempt from tariffs. If a large number of individual buyers are used to purchase and sell goods, they may face the need to pay high value-added tax, which is 17% stipulated by the state. If the tax is paid in full, the profit margin becomes limited. "Lei Zhonghui said.

However, the ant army method of smugglers often has problems with incomplete goods and unstable supply. Therefore, some e-commerce companies often purchase new products from offline retail channels and second-hand luxury goods replacement platforms to supplement their supply.

"The top luxury goods purchased from Chinese agents are not for sale, but more for obtaining some novel and unique products, putting them online to attract users and boost sales of other products. "Lei Zhonghui pointed out.

Driven by the dual drive of profit and scale, many e-commerce companies adopt the method of "mixing genuine and fake products" to "pass off fakes as genuine." Some of the counterfeit goods that are repeatedly banned flow into China from foreign counterfeit sales channels, and some are high-quality imitations of Chinese famous brands.

According to public media reports, many manufacturers have strong coordination capabilities for industrial chain resources, and can purchase everything from fabrics to accessories for luggage. The quality and feel of luggage are exactly the same as the real ones, but there are some differences in workmanship. Those manufacturers with slightly worse resources can purchase fabrics even if they cannot purchase accessories.

Not only that, many luxury brands have OEM factories in China, and these factories will also flow out some "defective" tail goods, just like the "tail goods" of foreign brand clothing. As long as the defects are not obvious, ordinary consumers can't see them. And the "factory price" of tail goods is sometimes even lower than that of imitations, and they are very popular in e-commerce.

"The profit of high-quality imitations is as high as dozens of times. "According to a person who runs a luxury e-commerce business, these high-quality imitations are usually well-made. The price of high-quality imitations (super-A products) of GUCCI and LV is generally 1,000 yuan. The price of a genuine Herm¨¨s bag is 30,000 to 50,000 yuan, but its high-quality imitation is less than 3,000 yuan. If you order in bulk, you can get a discount.

The counterfeiting methods of cosmetics are even more diverse. A person who used to do group buying of cosmetics told reporters that many e-commerce companies often use a 1:5 or even 1:10 dilution ratio after getting the original cosmetics, mixing the real cosmetics liquid into the fake cosmetics liquid. The technology is mature, and there is basically no need to inject the original liquid into the fake liquid (paste), but directly imitate the original product to make a liquid (paste) with a similar smell.

In addition to counterfeiting, cosmetics e-commerce companies also play tricks. According to a wholesaler who represents Japanese cosmetics in China, there are four origins of cosmetics of the same Japanese brand: Japan, Taiwan, Hong Kong, and mainland China. This is the authorization of the cosmetics brand. The brand authorization is real, but the concentration of the original liquid is different, and the price is also different. "All the products with Chinese characters are Hong Kong and Taiwan products, and the purchase price is at least 10%~15% cheaper than the original American (Japanese) products."

He told reporters: "Generally speaking, the price in Japan is 50% of that in China." The price of products produced in mainland China is lower than that produced in Taiwan, China, and Hong Kong, and even lower than that produced in Japan.

"Because the public only knows the brand, many e-commerce companies sell cosmetics produced in mainland China, and users often think they are imported from Japan. "Generally speaking, the packaging of the same brand produced in different countries or regions has only slight differences, which are not easy for ordinary consumers to find. For example, cosmetics that use paper packaging are often produced in mainland China or Hong Kong, China. Japanese companies pay more attention to environmental protection, and cosmetics produced in Japan are basically packaged in plastic.

Brands wait and see

The rule of the luxury goods industry is "brand is better than channel", whether it is luggage, cosmetics, or crystal jewelry, there is no exception.

According to the reporter's understanding, luxury goods generally adopt two channel models: direct sales and suppliers. Herm¨¨s, LV, and Channel all adopt a direct sales model around the world in order to implement a strict brand control system. Other luxury brands, as well as cosmetics brands such as Dior and Estee Lauder, use both self-operation and multi-level supplier models.

Currently, Herm¨¨s has a total of 21 stores in China, and LV has more than 40 stores. The relevant person in charge of Herm¨¨s China told reporters that Herm¨¨s China has no plans to enter the e-commerce industry at present. LV China also said that at present, the president of LV China is being changed, and there are no further plans for online sales.

"At present, foreign luxury brands are taking a wait-and-see attitude towards online shopping. "A luxury e-commerce executive told reporters that although it is unlikely that brand owners will engage in e-commerce themselves, doing luxury e-commerce in China will inevitably have an impact on their offline pricing system, otherwise, e-commerce business will not be able to be done."

A meaningful fact is that at the end of last year, Coach opened a flagship store on Tmall. Because the prices online and offline were the same, the business was bleak. In February of this year, Coach quietly closed the store.

"For luxury companies, whether they are direct sales or supplier models, they don't have to worry about sales because of their strong brand influence. However, online purchasing and B2C e-commerce have impacted their offline channels." Li Chengdong believes that, therefore, "Herm¨¨s will suppress online purchasing and B2C to avoid affecting its offline channels."

Currently, Chinese luxury websites are struggling to survive.

"Taking into account labor and operating costs, luxury goods are basically not profitable. "Xu Qin, the public relations officer of Zouxiu.com, admitted that currently only 30% of Zouxiu.com's revenue comes from luxury brands, 40% from Korean clothing, and the remaining 30% from mid-range international fashion brands. She told reporters that Zouxiu.com is no longer positioned as a "luxury product" but a mid-to-high-end women's product platform, and luxury goods are just a marketing tool to attract customers.

Previously, Chen Xiao, CEO of Youzhong.com, made a judgment in an interview with the media that an important criterion for luxury shopping websites is that the average customer spending must exceed 2,000 yuan. If judged by this standard, those Chinese e-commerce websites with the title of "luxury" are also "unworthy of the name." At present, the average customer spending of Zouxiu.com is more than 600 yuan, while Vipshop's average customer spending is only more than 100 yuan, which is comparable to the average customer spending of popular platform e-commerce such as JD.com and Taobao.

Youzhong claims that in addition to first-tier luxury brands, it has reached purchasing intentions with second-tier luxury brands, and can go to some brand ShowRooms to place orders directly.

"Luxury e-commerce needs to wait for a relatively long time before it can achieve large-scale development. "Ebrun editor-in-chief Jia Penglei told reporters that it is not easy to get authorization from international brands to boost sales and establish their brands. Some second-tier European and American brands are not well known to Chinese consumers, so it takes time to boost sales." Similarly, cosmetics e-commerce has also begun to change to survive. The prices of international brands' cosmetics have become transparent, and profits have become thinner, while private brands have greater profit margins. Chen Ou told reporters, "At present, the sales revenue of Chinese cosmetics brands has exceeded 50%, and those international brands are more used to attract users." Lefeng.com has created its own cosmetics brand for mature women-Jingjia. Lefeng.com CEO Wang Licheng also said that private brands are an important product component of Lefeng.com. "Private brands have higher profits and can also avoid the problem of supply." Li Chengdong believes that promoting private brands of cosmetics is a "whitewashing" path, but "cosmetics recognized by young women are still international brands, and it is more difficult to create private brands of cosmetics than clothing." (The article has been deleted)

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