Luxury goods were the fastest growing cross-border e-commerce category in the first half of 2021, increasing by 50 per cent compared to the end of 2020. According to research, the rise is being driven by Millennial and Gen Z shoppers in China, UAE, South Korea and India, who are now increasingly “happy to forego the ‘white-glove’ in-store experience for online convenience.”
The findings are from eShopWorld’s (ESW) Global Voices: Pre-Peak Pulse 2021 survey, which polled almost 15,000 consumers across 14 countries. The strongest markets are split across China (39 per cent), UAE (33 per cent), South Korea (28 per cent), and India (21 per cent). Meanwhile, more than 70 per cent of Millennials, GenX and Baby Boomers in China and South Korea shop luxury online, compared to less than 45 per cent of shoppers in the Americas and most of Europe.
Last year, the luxury market was forced to reprioritise digital strategies to offset the impact of the pandemic, resulting in a paradigm shift. Online luxury sales are predicted to increase to 30 per cent in 2021, up from 22 per cent in 2020. The boost is largely being driven by Millennial and Gen Z shoppers, who according to Vogue Business, will account for a fifth of all luxury fashion spend by 2025.
ESW’s survey reveals that while a significant number of luxury shoppers (42 per cent) still prefer to shop in-store where they can touch and try on products, even more shoppers (43 per cent) say they are happy to forego the in-store luxury experience for online convenience. Just as many (42 per cent) are making those purchases from brand websites outside their home country.
More than half of shoppers in Mexico (54 per cent), China (61 per cent), Russia (50 per cent), and South Africa (57 per cent) said they are comfortable buying luxury products online due to the lack of availability and variety of such goods locally.
When purchasing luxury products online, 77 per cent of those polled said they expect exceptional personalised customer service, with 75 per cent indicating brands and retailers could do more to improve in this area. Moreover, 69 per cent said they are more likely to buy luxury goods online if the online experience mirrors the level of service received in-store.
Martim Avillez Oliveira, chief commercial officer, EMEA and APAC at ESW, comments: “The quality, craftsmanship and prestige of luxury products is in increasing demand from a growing digitally native middle class, living outside the traditional luxury markets, who are both brand and status hungry. Therefore, to capitalise, luxury brands need to focus on recreating the high-touch, hyper-personalised experience customers receive in-store, in the DTC channel, and deploy those experiences across borders to meet demand at its point of origin.
“The luxury brands that continue to adapt and embrace omni-channel strategies that meld the expectations of the modern consumer with the traditional tenets of the luxury experience – from super-premium customer service including tracked, personalised delivery, free returns, luxury packaging and premium courier services to immersive online experiences – are the brands that will thrive.”
Luxury brands partnering with ESW can enter new international markets in as little as six weeks, up to six times faster than if they attempted to do so on their own – all while engaging directly with customers and retaining ownership of all the data collected during the shopping process.