Many luxury jewellery and watch brands are well versed regarding the prominent shopping events that take place during the domestic retail calendar. However, there are many additional dates in key international markets that are overlooked by British brands and subsequently many opportunities to drive online cross-border conversion rates by running local promotions are, unfortunately, missed. One notable example is the Qixi Festival, China’s Valentine’s Day, which takes place this year on August 7. This traditional event falls on the seventh day of the seventh lunar month (usually August) in China and has been deeply rooted in Chinese tradition since the Han Dynasty (BCE 206 – AD 220). Subsequently, the event has become a major shopping and retail event, especially for luxury brands. Neil Kuschel, CEO Europe, Global-e, a cross-border e-commerce specialist, describes the opportunity for British jewellers targeting Chinese customers.
Some of the leading global brands have already recognised the opportunity. This year Prada is launching exclusive heart-shaped bags, Michael Kors is launching a special product capsule collection to woo Chinese customers and UK brand Burberry is launching its first locally conceived and locally produced integrated campaign for the Chinese market promoting limited edition Burberry products.
According to Forrester, China’s online retail market is expected to hit $1.8tn in 2022, 10 times the size of Japan’s market ($159bn) and more than double the size of the US market, which will reach $713bn in 2022. Online luxury sales in China are expected to grow by up to three times its current size, to account for an eighth of China’s 1.2 trillion RMB luxury market by 2025.
Rising demand for foreign products is also spurring growth, with research from the China Chamber of International Commerce, Deloitte and AliResearch revealing that China is now the world’s largest importer of ecommerce goods and with the rate of people buying imported goods through cross-border ecommerce platforms rising rapidly. Chinese consumers are leading this positive growth trend around the world and represent a high proportion of the global luxury retail market which is expected to continue to grow €320-365 billion by 2025. McKinsey forecasts that by then, a fifth of all personal luxury sales worldwide will be made online.
British luxury and jewellery brands looking to maximise on the online global opportunity by growing their international online sales and customer base should aim to leverage every unique opportunity; whether for the Qixi Festival or for one of the many other local shopping holidays that take place worldwide throughout the year.
However, to truly capitalise on these opportunities, it is essential that retailers and brands ensure that they offer their international shoppers a seamless, localised shopping experience.
This includes enabling international shoppers to browse and purchase in local currencies (in China, the Chinese Yuan) and via their preferred payment method, whether it’s online payment, a card or other local alternatives such as cash on delivery or open invoices. In China, for example, our data shows that 74% of cross-border online shoppers prefer to pay with one of the popular alternative local methods – WeChat Pay, UnionPay or Alipay.
Another important issue to bear in mind are duties and taxes. In many countries around the world, cross-border online purchases are subject to local duties and taxes with markets imposing differing import regulations and thresholds. Being hit with additional duties and taxes upon delivery is one of the greatest concerns that online shoppers face and one of the main barriers to purchasing cross-border.
This is especially relevant when purchasing luxury goods as the high average order values surpass most local thresholds. To prevent this from hampering conversion rates, merchants should provide cross-border shoppers with an upfront guaranteed calculation of all duties and taxes owed on their purchases with the option to prepay at checkout to avoid any hidden costs.
Shipping propositions should also be tailored and adapted to local purchasing preferences, therefore it’s important to understand the preferred delivery and return methods in each market as well as the common rates to ensure that shipping offerings are competitively priced.
Qixi Festival is just around the corner, but there are many additional ecommerce sales opportunities associated with specific holidays or occasions happening all around the globe throughout the year. During August, for example, Eid Al Adha, a busy shopping holiday both in-store and online is celebrated in Middle East countries such as Saudi Arabia and the UAE, and Father’s Day is celebrated in Brazil.
To take advantage of local shopping peaks like these, retailers and brands should be able to offer special promotions in specific markets without running the same promotion in all international markets.
The global demand for buying luxury goods online is on the rise. However, the key to capitalising on this rapidly growing opportunity is a strong understanding of local markets around the world. To boost global sales, brands and retailers of jewellery and watches need to provide international shoppers in each market with a high quality and localised online experience that’s tailored to their preferences.
This is the proven way to feel their love, gain their trust, increase satisfaction and boost international online conversion rates.