May 27, 2016, 8:00 AM

Affluent Chinese web shoppers love foreign brands

Names like Chanel, Louis Vuitton and Michael Kors show up among the favorite brands for Alibaba’s super-high-end consumers.

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Every retailer makes a special effort to please its best customers. And Alibaba Group Holding Ltd., China’s leading operator of online retailer marketplaces, is no exception.

Alibaba in 2014 created an invite-only membership program called Alibaba Passport geared to consumers who spend at least 300,000 yuan ($45,767) a year on Alibaba’s retail sites in China, mainly the Taobao and Tmall online shopping malls that account for well over half of all online retail spending in China. The Chinese e-commerce giant recently released a report describing these consumers and how it serves them.

While Alibaba did not disclose how many consumers belong to the program, commonly referred to in China as Apass, it did say there is one Apass consumer for every 10,000 shoppers on Alibaba’s sites. That suggests there are about 40,000 Apass members as the e-commerce giant has 400 million annual active users.

There is a much larger group of what Alibaba considers high-end shoppers—those that spend 5.5 times as much on Alibaba sites as the average consumer in the same province. The Alibaba report projects the number of Chinese online shoppers in this category will top 61 million in 2020, equal to the current population of Italy.

Many Apass members are under 40, affluent and female. And they’re big fans of foreign brands. Alibaba says 60% of Apass members were born after 1980 and that 60% of them live in households with annual income of more than 600,000 yuan ($91,530). (The median household income in China is just above $10,000). A third of Apass members are executives in private companies, while others include full-time moms and consumers with special interests, such as collectors of limited-edition Lego toy sets, according to the report. 60% of Apass members are women and 40% men.

Every Apass member has a designated service representative who offers personalized shopping suggestions and after-sales services. Other perks include exclusive discounts, free return shipping and offline party events. 

Alibaba says it also works with several international brands, including U.S.-based cosmetics brand Estee Lauder, British vacuum cleaner maker Dyson and Italian luxury carmaker Maserati to offer exclusive products or personalized products to those upscale consumers.

Maserati, for example, allowed Apass members to pre-order its new Levante SUV, which was announced in March and sells for 999,800 yuan ($150,000). The 100 cars it offered on Tmall sold out in 18 seconds.

The report says nearly 90% of Apass members make more than 60% of their retail purchases online. They shop online 2.6 times frequently than average shoppers and their average order is 10 time larger than that of the typical Chinese web consumer, the report says. In addition, Apass members often travel internationally and consume more imported liquor than average consumers.

Foreign brands—from Italian luxury outerwear maker Moncler to Japanese cosmetics brand Shiseido—figure prominently in the brands preferred by Apass members, according to the Alibaba report. Here are the most popular brands for Apass members by category:

  • Apparel: Lin Edition Limit, Uniqlo, Mo&Co, Moncler, Rumere
  • Skincare: Shiseido, SK-II, La Mer, Cle de Peau, Estee Lauder
  • Cosmetics: Cle de Peau, Chanel, Dior, YSL, Kanebo, Armani
  • Bags: Louis Vuitton, Coach, Chanel, MCM, Gucci, Michael Kors
  • Shoes: UGG, Ecco, Nine West, Skechers, Stuart Weizmann, Ferragamo

For more Chinese e-commerce data, please click here for the new-released Internet Retailer 2016 China 500

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