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China's grey market significantly impacts the online sales of leading luxury brands, according to a recent report by data consultancy Re-Hub. The growing popularity of platforms like Dewu, China's largest grey market marketplace, is exerting pressure on powerhouses such as LVMH and Kering, squeezing their profit margins due to this tr.
The popularity gap between Dewu sales and brand official stores during the peak shopping season from October to March for Moncler and Canada Goose is stark. For some popular products, sales volumes were reported to be 2.5 to 15 times higher on Dewu than in Tmall, Alibaba's dominant e-commerce platform, with figures showing that sales were 6.8 times more on Dewu compared to Cartier and Van Cleef Arpels from Richemont Group during the first half of this year.
Cartier, for instance, had best-selling items sold at steep discountsup to a shocking 54 reduction in price. On August 22nd, the same day as the analysis, a Cartier ring priced at 18,200 yuan $3,347 was advertised on Dewu for approximately half that amount.
Fi handbags were also highlighted, with similar high discount rates being reported. The growing presence of grey market platforms is impacting not only luxury brands but has implications for the overall businessand strategies of these giants in the retl industry.
The analysis underscores how the rise of the grey market can influence consumer purchasing patterns and the need for luxury brands to adapt their online sales strategies accordingly, including potentially enhancing their own e-commerce operations or partnering with reputable platforms.
As this tr continues to grow, it prompts questions about regulation and oversight within China's vibrant digital retl landscape.
In , Dewu's growth highlights a significant shift in consumer behavior towards grey market purchases for luxury goods in China, presenting both challenges and opportunities for the global luxury industry.
that the figures presented above are illustrative and should be confirmed with original sources or relevant data reports for accuracy.
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Luxury Brands Face Pressure from Grey Market Chinas Dewu Outcompeting Official Stores Online 8 Times Higher Sales on Grey Market Platforms Cartier Products Suffered 54 Discount Online Fendi Handbags Witness Similar Price Reductions Global Luxury Industry Navigates Chinese Digital Retail