German luxury e-tailer Mytheresa is refocusing its efforts to grow its business in China, a notoriously competitive e-commerce landscape dominated by local giants Alibaba and, increasingly, Douyin, the Chinese version of Tiktok.
The company plans to court shoppers in the world’s third-largest luxury market by employing personal shoppers and holding in-person events, its chief executive officer Michael Kliger said on Monday.
“The company [globally] has grown 20 percent-plus in recent years, and our expectation from China in coming years is double that,” Kliger told Reuters in Shanghai.
“Because we are so small here, this doesn’t even mean we are going against the big guys; it’s still a very special customer we focus on.”
Kliger said the company was positioned to appeal to “mature” luxury customers in China, adding that Mytheresa’s top 3 percent of customers account for 35 percent of total sales.
“The luxury customer that just starts a love affair with luxury that is looking for her or his first piece, it’s probably not the target that we have in mind,” he added.
Other global luxury e-commerce players, such as Farfetch and Yoox Net-a-Porter, have long tried to crack the China market. Both have now joined forces with market leader Alibaba via an investment tie-up and joint venture deal, respectively.
Mytheresa first registered a local Chinese company in 2017, but progress was stymied by Covid. Last year, it began making fresh moves for the Chinese market, with Kliger hiring a new Asia-Pacific president, Steven Xu, and starting to sell on the Chinese e-commerce platform JD.com in addition to its own app and website.
Patrice Nordey, managing partner at innovation agency EY Fabernovel, said Mytheresa’s positioning towards the higher end of the luxury consumer pyramid will help, but the competitive landscape remains an obstacle for a company shipping products from Europe into China.
“I would question whether an international platform that is serving Chinese customers from overseas will be able to deliver service that is in line with the expectations of consumers here,” he said. “That is something other platforms have struggled with in the past.”
By Casey Hall; Editors Brenda Goh and Christina Fincher
Mytheresa Growth Slows, Profits Narrow Amid Challenges For E-Tailers
Growth at Mytheresa slowed significantly last quarter, as aspirational customers feeling the pinch from inflation pulled back on spending during the holidays, CEO Michael Kliger said.