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Decoded Fashion - Weekly Stories - Alibaba
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Jack Ma, founder of Alibaba, recently said: “In other countries, e-commerce is a way to shop, in China it is a lifestyle.” By 2015, ecommerce transactions in China are forecasted to hit $540bn and by 2020, China’s ecommerce market will grow larger than US, Britain, Japan, Germany, and France’s market combined.

There’s no doubt that Alibaba’s $25bn IPO in October changed the game for the e-commerce industry as a whole. What turned out to be the largest global IPO in history, has raised questions about the possible ramifications for already established online retailers, luxury brands and whether Alibaba is now a threat to their businesses.

The answer is not necessarily. Indeed, Alibaba has a robust international expansion plan that may change the way consumers shop in the West and Far East, but this could also benefit luxury retailers due to the growing unmet demand of Western products from Chinese consumers.

Alibaba’s IPO could give Western brands solid new opportunities to access Chinese consumers in abundance. Alibaba and its subsidiaries (Taobao, Tmall) have approximately 500 million registered users with 70 million daily visitors on Taobao alone.

Making purchases online from China for luxury goods based in America or Europe is still difficult for Chinese consumers. But as part of Alibaba’s international expansion plans, they will now enable Western retailers to sell to Chinese consumers on their marketplace platform Tmall international (similar to Amazon).

With its recent IPO, the company is now realising the revenue potential of allowing Western brands to sell to and access their customer portfolio, something that was previously shielded. This will allow Alibaba to create new revenue streams due the growing demand for Western goods by the Chinese who account for nearly 50 per cent of total global luxury sales.

One of the benefits of Alibaba allowing Western retailers access their Chinese customers includes a potential reduction in the number of counterfeiters that use Alibaba’s Aliexpress and Taobao platforms to sell fake branded products. This, in turn will force Alibaba to attempt to tackle the huge intellectual property and counterfeiting issues that the company faces on its platforms. Ultimately, however, by allowing Western retailers to reach the Chinese markets, Alibaba will open a two-way-street in international online trade, something that was previously absent in luxury fashion.

Some western retailers that have tried and failed to compete with Alibaba to bring Western goods to China include eBay and Amazon. Both do not yet possess the capacity to compete with Alibaba’s scale and customer following in China. Amazon China accounted for less than 3 per cent of total online transactions in 2013. And Alibaba recently reported that their total sales in 2013 were greater than that of eBay and Amazon’s combined.

Alibaba will ultimately have to adapt to the market Western customers are used to by listening to and implementing their feedback as well as streamlining their supply chain process to deliver goods from the West to the Far East and vice versa. But by allowing Western retailers to reach the Chinese markets, Alibaba will benefit considerably, namely by expanding on its core business model and thus maximising revenue potential from its international retail partners. With Alibaba’s new dominant presence in the US post-IPO and its budding international retail partnerships with Tmall, it seems the West have yet to see the true spending power of the Chinese.

Reported by Jessica Anuna

Decoded Fashion New York will take place on November 18-19, 2014 at Metropolitan West. The full agenda can be found here.

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“Tesco has struck a deal with House of Fraser to sell the department store’s products on its website, the supermarket giant said yesterday, as it seeks to stem its declining sales.

After trialling the offer earlier this month, Tesco said House of Fraser has agreed to sell 2,000 products from homeware brands including Linea and Pied A Terre.”

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Decoded Fashion - Fashion Tech Daily - House of Fraser
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“China’s Ministry of Commerce released today its official estimate of 2013 online retail sales, confirming what many already suspected: Chinese consumers now buy more online than do their U.S. counterparts.

Online retail sales in China in 2013 totaled 1.85 trillion yuan ($296.57 billion) in 2013, representing 41.2% growth from 2012—triple the growth rate of overall retail sales in China, according to the Ministry of Commerce. China’s online shopping total is 13.0% more than 2013 U.S. e-retail sales of $262.51 billion, which grew 16.9% in 2013, according to the U.S. Department of Commerce.”

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Decoded Fashion - Fashion Tech Daily - e commerce
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“Need is an online magazine and retailer for men who hate to shop, but still want to find unique clothing and lifestyle items. The Dallas-based startup announced today that it has raised $500,000 in seed funding led by investors Greg Abbott, CEO of International Dispensing Corporation (IDC); Imran Sheikh, CEO of Aftershock London U.S., and Mobelux, Need’s development partner.”

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Decoded Fashion - Fashion Tech Daily - Need
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3. “For the six months to February 28, Asos revealed retail sales up 34% to £472.3m. UK sales rose 35% to £182m while international sales increased by 35%to £290.3m. Profit before tax fell 22% to £20.1m due to ‘accelerated investment’ in its logistics, IT platform and Chinese launch.”

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Decoded Fashion Fashion Tech Daily Asos

Decoded Fashion - Fashion Tech Daily - Prada Bespoke Soles

 

1. Facebook Buys Oculus, Virtual Reality Gaming Startup, For $2 Billion

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” Zuckerberg said in a statement. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

2. Prada Creates Bespoke Shoe Service

Luxury brand Prada is offering a bespoke service at its London store for two days with their ‘Made to Order Décolleté’ collection.

3. Eres Partners With Net-a-Porter

Starting Friday, the Eres spring collection will be available for worldwide purchase via Net-a-Porter. The brand has entered into a partnership with the luxury e-tailer because “they cater to luxury customers, are a major player on the Internet, and the way they treat the brands is quite up to the level of Eres.”

4. Instagram Testing Facebook Places Integration To Replace Foursquare

Instagram is testing location tagging using Facebook Places rather than Foursquare, possibly “to determine whether Foursquare’s API actually lives up to its hype, or whether its value can be duplicated by a larger competitor.”

Decoded Fashion - Fashion Tech Daily - Zappos

 

1. Birchbox, Seller of Beauty Products, Steps Out From Web With a Store

Birchbox plan to extend their online presence to offline by opening their first brick-and-mortar store in SoHo, New York.

2. How Yoox became the Amazon of the Fashion World

With two million orders placed every year and net revenues up over 20 per cent from last year, Yoox has become one of the leading e-tailing sites in fashion. A glimpse into the company’s operations and history.

3. How Tech Startups are Taking the Fashion Runway by Storm

“Fashion is not your typical tech startup” – How fashion-tech is democratizing the fashion industry and making it more tailored to consumers’ needs than ever before.

4. Zappos Creates Personalized Shopping Experience For Instagram’s #OOTD Fans

Zappos are harnessing the potential of the approximately 23 million #OOTD-tagged images on Instagram with their ‘Next OOTD campaign.’