Luxury firms step cautiously into Web

10:26, June 12, 2010      

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Buying diamond watches or designer labels online might seem detestable for those able to jet across the world for a shopping spree, but global luxury firms are slowly but surely investing in e-trade.

Two high-end French labels, Lacoste and Mauboussin, have just opened Internet boutiques, while British luxury website net-a-porter has been bought out by luxury Swiss group Richemont, owner of Cartier and Chloe.

In a sector where exclusivity touches as well on distribution and price control, the cultural revolution has been slow in coming.

In 2009, worldwide luxury sales on the Internet totaled 3.5 billion euros ($4.2 billion), a fraction of total sales amounting to 153 billion euros ($185 billion), Bain &Company said.

Consultant Precepta said Internet sales in the luxury sector could double to 7 billion euros ($8.5 billion) in 2011.

Lacoste, which hopes to generate 100 million euros ($121 million) in turnover via Web sales by 2014, is also counting on the move to rejuvenate its image.

French jeweler Mauboussin, which just launched e-trade in France, expects to see Internet sales of 6 million to 8 million euros ($9.7 million), "equivalent to a Paris boutique."

Faced with the boom in e-trading and a change in customer habits, the luxury sector has had to give in and follow suit to avoid subsidiary sites grabbing a slice of the pie, such as multi-brand stores such as Neiman Marcus or specialized Internet boutiques such as net-a-porter.

But many high-end brands, such as Louis Vuitton and Hermes, only offer a selection of their goods.

Jewelry firms such as De Beers in the United States, a joint-venture of De Beers-LVMH, or Tiffany for example choose to offer engagement rings on the net rather than more expensive sets.

"There's no hurry," said Philippe Pascal, who heads LVMH's watch and jewelry division. "After-sales service has to be perfect to ensure customers are entirely happy with a purchase."

Source: Global Times


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