NET-A-PORTER makes big step entering China

Net A Porter, Karl Lagerfeld

The Chinese e-commerce platform Shouke Limited, founded by multi-brand retailer Joyce is set to be acquired by the London-based online retail powerhouse Net-A-Porter, marking that company’s first major foray into the China market. As WWD notes today, following its purchase of Shouke, Net-A-Porter plans to launch a new website based in China this March, and open a distribution center in Hong Kong at an unspecified later date. Though details are scarce pending an official announcement expected this week, Shouke’s founders are expected to stay on-board following Net-A-Porter’s acquisition to run the company’s Asia-Pacific division.

While Net-A-Porter’s plans to move into the China market have long been expected — the country’s luxury e-commerce sales surpassed 10 billion yuan for the first time last year, and are projected to grow at a pace of 30 percent annually for the next several years — its status and reputation abroad don’t mean China will be an easy market. The members-only Shouke was only one of many well-capitalized luxury e-commerce platforms to spring up in China in the last couple of years, and the country’s lack of a clear leader in the segment presents both an opportunity and a massive challenge to Net-A-Porter.

To set itself apart, we’d expect to see Net-A-Porter leverage its relationships with designers and brands both large and small to host capsule collections not easily found in China, and not available to other online retailers there. Recently, Vogue China and collaborated on a special “Vogue Talents Corner on the site, selling designs created by five up-and-coming young Chinese designers.

In addition to featuring work by emerging designers, Net-A-Porter may choose to feature lesser-known brands that are interested in expanding into China, catering to the deepening tastes of top-tier consumers. With dozens of luxury-focused online retailers to choose from, including international players like Yoox and soon Net-A-Porter and dozens of domestic platforms, the China e-commerce industry may be in dire need of a shakeout.