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Bricks-and-mortar stores give way to catalogues, Internet and TV
ON one single day, more than 40 orders were placed for BMW autos - this may sound absurd given the current recession, but it happened in Shanghai recently.
OCJ, the local TV shopping channel, offered two models of BMW 1 Series through a live show early this month. On the premiere night, 19 were ordered in 45 minutes. More inquiries and orders came the next day.
Priced at 288,000 yuan (US$42,167) and 445,000 yuan, these cars have sold on TV at almost the same prices as in the city's BMW retail showrooms. The difference is that TV-bought models come with alluring gift packages valued at 50,000 yuan and 100,000 yuan respectively, which include a Sony LCD TV and car accessories.
The first customer, a man in his 40s who declined to be identified, ordered a BMW 120i AT via phone 15 minutes after the show began. In fact, he had been to BMW "real" brick-and-mortar stores several times to learn about the car before he saw it on TV. Most important, as an established VIP customer with OCJ, he says he "trusts this way of shopping."
Nowadays, when traditional retailers and department stores are suffering from declining business, more and more Chinese people are getting used to shopping at home through TV, telephone or computer.
It's very convenient - you can pay COD, or use a credit or debit card with an electronic banking device when the product is delivered.
Slowly the custom of kicking the tires, looking under the hood and feeling the fabric is turning into an acceptance of home shopping, an established habit in Japan, for example.
So far, OCJ has a client base of nearly 2 million, compared with 135,000 in 2004. Apart from luxury automobiles, it has sold diamonds worth more than 200,000 yuan each. The most popular items are cosmetics, computers, digital products, mobile phones and household appliances.
The local TV channel's sales revenue back in 2004 was 154 million yuan. Last year, it amounted to 1.6 billion yuan. In the first three months of this year, the figure has already soared to 600 million yuan.
On April 16, Uniqlo, Japan's leading casual wear manufacturer, launched an online "flagship" store (www.uniqlo.cn) for China in partnership with Taobao, the country's largest consumer e-commerce company. Taobao had almost 100 million registered users by the end of 2008.
China is the first country outside Japan where Uniqlo has an online shopping presence. This partnership is aimed to help the Japanese fashion retailer increase brand awareness and make inroads into the growing Chinese e-commerce market.
Sephora is another example. The French beauty retailer recently celebrated its fourth anniversary in the country. It launched its online China business in 2006.
"China is such a big country," says Maciej J. Szymanski, president of Sephora China.
"It (the online store) has surely helped us reach a larger size of clientele, especially those in the small cities where our virtual stores are not present yet," he says. "We are dedicated to continuing this strategy."
Earlier than Sephora, French distance-selling company 3Suisses entered the Chinese market in 1996, when distance selling was still a new shopping concept.
"It (the business) has developed tremendously since then, partly thanks to the Internet," says Anne Langourieux, general manager of 3Suisses China. "We used to receive loads of envelopes and order forms through the post office. Now our customers mainly use Internet or phone."
According to her, since the company does not have to bear the costs of virtual stores or pay commissions to department stores, it is able to offer the same level of fashion products at much lower prices than traditional retail brands, such as H&M and Zara.
But there are still many people who are reluctant to purchase unless they see and touch the real products themselves, she says.
The company recently organized a runway show at a city gallery, inviting customers to "see and touch" the house's newest spring and summer collections.
"This was our third runway event and customers love and praise it," Langourieux says. "Then they trust us for any catalog because they have seen the quality of our products."
3Suisses was among one of the first in the French mail-order industry to invite top names in design to create products exclusively for the brand, including agnes b. (1982), Jean-Paul Gaultier (1983), Kenzo Takada (2005) and this year, renowned French haute couture designer Anne Valerie Hash.
This season, it has also, for the first time, collaborated with a Chinese designer to launch a limited collection. The collection, created by local designer Ji Cheng, will be sold exclusively in China through 3Suisses' networks.
DHC, Japan's largest home-delivery skin-care company, started its business in China in 2005, advertising extensively on TV, newspapers and public transport facilities, encouraging people to order its products through Website and mobile phone SMS.
Two years later, it opened its first store in Guangzhou, Guangdong Province, to meet customers' requirements.
"Customers complained that they could only try and use a limited selection of products they ordered while we have more than 300 kinds of products," explains Ivy Fang, business director of DHC China. "That's why we decided to open retail stores in which people are welcome to try any DHC products they are interested in."
Back home, DHC keeps the traditional home-delivery service, but in less than two years, the company has opened more than 200 virtual stores in nearly 70 cities throughout China.
The same with Shanghai Mecox Lane, China's first government-approved mail-order company and one of the biggest.
Established in 1996, Mecox Lane started a mail-order-only business selling clothes and fashion accessories by sending out catalogues.
The new concept soon caught public attention and business later expanded to home appliances. In 2000, the launch of its online shopping mall (www.m18.com) signified that Mecox Lane shifted its business from mail order to e-commerce.
Via a phone call, you have what you want delivered to your home. Mail-order service is convenient, but people still doubt. After all, pictures can be deceptive.
"It's not very reliable," says Liu Wei, 34, an accountant. "I've tried once, but the dress I got turned out to be slightly different in color and style from what I saw in the catalogue."
Liu is not the only one who complains.
Seeing the increasing need from customers, Mecox Lane in 2006 opened the first boutique store in Shanghai for its women's fashion line, Euromoda. Since then, 40 stores have been established across the city, with nearly 150 all over China.
"Now I feel better because I can go to the store to check the real products," says Liu. "It may sound ridiculous, but at least I feel safe."
OCJ, the local TV shopping channel, offered two models of BMW 1 Series through a live show early this month. On the premiere night, 19 were ordered in 45 minutes. More inquiries and orders came the next day.
Priced at 288,000 yuan (US$42,167) and 445,000 yuan, these cars have sold on TV at almost the same prices as in the city's BMW retail showrooms. The difference is that TV-bought models come with alluring gift packages valued at 50,000 yuan and 100,000 yuan respectively, which include a Sony LCD TV and car accessories.
The first customer, a man in his 40s who declined to be identified, ordered a BMW 120i AT via phone 15 minutes after the show began. In fact, he had been to BMW "real" brick-and-mortar stores several times to learn about the car before he saw it on TV. Most important, as an established VIP customer with OCJ, he says he "trusts this way of shopping."
Nowadays, when traditional retailers and department stores are suffering from declining business, more and more Chinese people are getting used to shopping at home through TV, telephone or computer.
It's very convenient - you can pay COD, or use a credit or debit card with an electronic banking device when the product is delivered.
Slowly the custom of kicking the tires, looking under the hood and feeling the fabric is turning into an acceptance of home shopping, an established habit in Japan, for example.
So far, OCJ has a client base of nearly 2 million, compared with 135,000 in 2004. Apart from luxury automobiles, it has sold diamonds worth more than 200,000 yuan each. The most popular items are cosmetics, computers, digital products, mobile phones and household appliances.
The local TV channel's sales revenue back in 2004 was 154 million yuan. Last year, it amounted to 1.6 billion yuan. In the first three months of this year, the figure has already soared to 600 million yuan.
On April 16, Uniqlo, Japan's leading casual wear manufacturer, launched an online "flagship" store (www.uniqlo.cn) for China in partnership with Taobao, the country's largest consumer e-commerce company. Taobao had almost 100 million registered users by the end of 2008.
China is the first country outside Japan where Uniqlo has an online shopping presence. This partnership is aimed to help the Japanese fashion retailer increase brand awareness and make inroads into the growing Chinese e-commerce market.
Sephora is another example. The French beauty retailer recently celebrated its fourth anniversary in the country. It launched its online China business in 2006.
"China is such a big country," says Maciej J. Szymanski, president of Sephora China.
"It (the online store) has surely helped us reach a larger size of clientele, especially those in the small cities where our virtual stores are not present yet," he says. "We are dedicated to continuing this strategy."
Earlier than Sephora, French distance-selling company 3Suisses entered the Chinese market in 1996, when distance selling was still a new shopping concept.
"It (the business) has developed tremendously since then, partly thanks to the Internet," says Anne Langourieux, general manager of 3Suisses China. "We used to receive loads of envelopes and order forms through the post office. Now our customers mainly use Internet or phone."
According to her, since the company does not have to bear the costs of virtual stores or pay commissions to department stores, it is able to offer the same level of fashion products at much lower prices than traditional retail brands, such as H&M and Zara.
But there are still many people who are reluctant to purchase unless they see and touch the real products themselves, she says.
The company recently organized a runway show at a city gallery, inviting customers to "see and touch" the house's newest spring and summer collections.
"This was our third runway event and customers love and praise it," Langourieux says. "Then they trust us for any catalog because they have seen the quality of our products."
3Suisses was among one of the first in the French mail-order industry to invite top names in design to create products exclusively for the brand, including agnes b. (1982), Jean-Paul Gaultier (1983), Kenzo Takada (2005) and this year, renowned French haute couture designer Anne Valerie Hash.
This season, it has also, for the first time, collaborated with a Chinese designer to launch a limited collection. The collection, created by local designer Ji Cheng, will be sold exclusively in China through 3Suisses' networks.
DHC, Japan's largest home-delivery skin-care company, started its business in China in 2005, advertising extensively on TV, newspapers and public transport facilities, encouraging people to order its products through Website and mobile phone SMS.
Two years later, it opened its first store in Guangzhou, Guangdong Province, to meet customers' requirements.
"Customers complained that they could only try and use a limited selection of products they ordered while we have more than 300 kinds of products," explains Ivy Fang, business director of DHC China. "That's why we decided to open retail stores in which people are welcome to try any DHC products they are interested in."
Back home, DHC keeps the traditional home-delivery service, but in less than two years, the company has opened more than 200 virtual stores in nearly 70 cities throughout China.
The same with Shanghai Mecox Lane, China's first government-approved mail-order company and one of the biggest.
Established in 1996, Mecox Lane started a mail-order-only business selling clothes and fashion accessories by sending out catalogues.
The new concept soon caught public attention and business later expanded to home appliances. In 2000, the launch of its online shopping mall (www.m18.com) signified that Mecox Lane shifted its business from mail order to e-commerce.
Via a phone call, you have what you want delivered to your home. Mail-order service is convenient, but people still doubt. After all, pictures can be deceptive.
"It's not very reliable," says Liu Wei, 34, an accountant. "I've tried once, but the dress I got turned out to be slightly different in color and style from what I saw in the catalogue."
Liu is not the only one who complains.
Seeing the increasing need from customers, Mecox Lane in 2006 opened the first boutique store in Shanghai for its women's fashion line, Euromoda. Since then, 40 stores have been established across the city, with nearly 150 all over China.
"Now I feel better because I can go to the store to check the real products," says Liu. "It may sound ridiculous, but at least I feel safe."
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