Beijing Secoo Trading Co. plans to open stores in Milan, New York and Paris that will cater to Chinese tourists.
Beijing Secoo Trading Co., a Chinese retailer that sells such luxury items as watches and handbags online, has raised $100 million to open shops in major Western cities to cater to the growing number of affluent Chinese traveling abroad.
The series D financing round was led by China-based CMC Capital Partners and is one of the largest infusions of capital into a Chinese luxury e-commerce company. Also participating were four existing investors: U.S-based IDG Capital, Japan-based Vangoo Investment Partners, and French companies Ventech Capital and Crehol China. Secoo also announced that it has secured a credit line of “tens of millions of U.S. dollars” from Silicon Valley Bank in California.
Secoo, No. 212 in the Internet Retailer China 500, booked just over $40 million in online sales in 2013, according to an Internet Retailer estimate.
Through its site, Secoo.com, the company sells luxury products such as Cartier watches and Hermes bags, and allows consumers to sell second-hand products. The company encourages site visitors to review products and exchange ideas with other consumers, and Secoo says 3 million consumers have registered with the site. The average purchase of about 8000 Yuan ($1290) is one of the highest among Chinese e-commerce site, the company says.
To provide after-sale services, such as watch and bags repairs, Secoo has built a 2800-square-meter (about 30,000-square-foot) workshop in Beijing.
Secoo also has opened shops in major Asian cities, and the company says it will use the new funding to open similar shops in major Western cities that attract Chinese tourists.
“We provide domestic services to consumers, but we also have a strategy for the global market,” Secoo CEO Li Rixue says. “Secoo has opened five offline stores in five Asian cities, including Beijing, Shanghai and Chengdu, Hong Kong and Tokyo to work as showrooms and places for high-end consumers to socialize. We plan to open stores in Milan, New York and Paris in this year.”
Most of its customers are Chinese consumers, or Chinese traveling abroad, Secoo says. More than 98 million Chinese tourists traveled abroad in 2013, according to TravelChinaGuide.com, a Chinese tour company.
The e-retailer has not indicated it plans to build foreign-language version of its e-commerce site. The site is in simplified Chinese, the written language of mainland China, but a section geared to Hong Kong residents is in traditional Chinese, the written language used in Hong Kong, Macau and Taiwan.
Sales of luxury goods are booming in China and the country has become the largest market in the world for international high-end brands, according to consulting firm Bain & Company. Chinese consumers spent 350 billion Yuan ($56.42 billion) on luxury goods in 2013, with two-thirds of that spending taking place overseas, Bain says.
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