Over the past few years, as Chinese consumers have embraced e-commerce, online retailers specializing in European luxury goods have become wildly popular with shoppers looking to sidestep Chinaâ€™s heavy luxury taxes. These independent online shops â€” often run by Chinese overseas students in their spare time â€” by and large are hosted on Taobao, Chinaâ€™s hugely successful answer to eBay, and process payment through Alipay, Taobaoâ€™s answer to Paypal. Recently, however, Paypal linked up with China UnionPay in an effort to compete with Alipay â€” which claims 3/4 of Chinaâ€™s online payment market â€” offering Paypal accounts that allow customers to shop on overseas websites.
While this might be bad news for Alipay, the ever-intensifying fight for market share is great news for Chinese consumers, who now have an increasing number of options for online shopping. As a Peopleâ€™s Daily article this week points out, as online payment companies continue to duke it out and offer more incentives, Chinese shoppers can now avoid dealing with currency exchange and do more direct online shopping from individual global luxury brands or shopping portals.
From the article (translation by Jing Daily team):
Nowadays, consumers can skip the complex process of currency exchange, and purchase luxury goods from Gucci, Prada, Armani and other international brands directly through their websites.
Recently, after the Italian luxury brand Forzieri announced its cooperation with Paypal and launched a direct payment feature, the well-known fashion retail site Raffaello Network decided to test the waters of the Chinese online shopping market. As the No. 1 Italian fashion e-commerce website, Raffaelo Network sells Gucci, Prada, Fendi, Armani, Versace, Todâ€™s and many other international brands. Consumers can not only choose from among 40 designers and 15,000 items according to their taste, but also enjoy an average 40% discount below retail prices.
It has been reported that during the transaction process, Paypalâ€™s â€œoverseas purchaseâ€ service helps domestic [Chinese] consumers exchange yuan into foreign currencies immediately, which is then paid to the seller for overseas shopping, which increases the convenience of direct transactions. At present, the â€œoverseas purchaseâ€ feature supports currencies like the British pound, U.S. dollar, Swiss franc, euro etc. â€” 12 foreign currencies in all.
In response, industry insiders have claimed that the convenience of overseas payment has greatly stimulated the desire of Chinese consumers to shop online, which could lead to more overseas online shopping sites entering the Chinese market.
Global Luxury Brands â€œTesting The Watersâ€ In Chinaâ€™s E-Commerce Market originally appeared on Jing Daily, and is republished on Signature9 with permission.