Opportunities for Western Brands To Clear Inventory of Discretionary Products: Off-Price Luxury on the Rise in China

In China, demand following the Covid-19 crisis is strong in the off-price luxury sector. As such, we have seen some Chinese e-commerce platforms recently launch luxury outlet channels:

• On April 20, 2020, Tmall unveiled a new luxury channel called “Luxury Soho,” on its Tmall e-commerce platform. The new channel runs alongside the company’s existing Luxury Pavilion, which focuses on a more affluent group of consumers and sells branded products at full price. Luxury Soho, on the other hand, will sell products from high-end brands at discount prices, just like a physical outlet.
• On April 3, Xiaomi Youpin, an e-commerce platform operated by Chinese electronics company Xiaomi, also launched a portal offering discounted luxury products.

Luxury Soho

Source: Tmall

 Western brands and retailers could consider collaborating with these luxury discount platforms in China to clear some of their inventories, given that many are likely to be grappling with excess stock in the wake of a coronavirus-led downturn in demand.