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People's Daily Online>>China Business

High-end Web shops being hit

By Wang Wen (China Daily)

09:47, April 16, 2012

A luxury store in Hangzhou, East China's Zhejiang province. China's online luxury sellers are having tough times but analysts say the online market will continue to boom. [Photo / China Daily]

China's online luxury retailers, who experienced a boom in 2011, are running into trouble due to the industry's low-price strategy.

Some leading online luxury retailers had to contract their business by reducing employee numbers.

A staff member at Zoshow.com Inc surnamed Hu, who used to work in the company's marketing department, left the company in January, when it moved both its marketing and data managing departments from Beijing to Shenzhen, where its headquarters are located.

"The movement was just a normal staff transfer," said Ji Wenhong, CEO of Zoshow.com.

But Hu said very few of the original 60 employees transferred to Shenzhen.

It is rumored that Shangpin.com, a member-only online luxury retailer, has also reduced its payroll since January.

A former employee of Shangpin.com, who refused to be identified, said she left the company because of its decreasing turnover.

The industry's tough times started at the end of 2011.

Last December, employees of Wooha.com posted a letter on the website's homepage demanding their back pay. Wooha.com was one of China's pioneering luxury online retailers and had planned to be listed by 2013.

The website's business ground to a virtual halt after the wage arrears affair.

NetEase Inc, one of China's four largest portals by market share, closed its online luxury sales department on Jan 1.

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