Secoo Holding Limited, China’s largest premium e-commerce platform, signed a strategic collaboration contract with Parkson Retail Group, a leading international department store also operating in China.
The two’s alliance will expand the NASDAQ-listed company’s offline channels and deepen its reach in customer-experience-infrastructure. In the third quarter of 2017, Secoo achieved a total net revenue of USD 147.6 million, constituting a 44.2% increase over the same period last year. Its third-quarter profit margin steadily increased from 16.2% to 17.0%, year over year.
As a market leader, Secoo demonstrates a great deal of development potential. A recent Bain & Company report highlighted a growth of approximately 20% in domestic luxury goods sales in China in 2017, an amount totalling RMB 142 billion (USD 22.07 million). In the same year, China dominated 32% of the world’s luxury goods market.
The contract signing with Parkson Retail Group, Secoo’s first strategic alliance with a leading traditional department store in 2018, marks the consolidation of a grand lifestyle ecosystem that will usher in innovative, dynamic channel expansion and business model improvements.
“Parkson covers a wide range of cities in China. Their target middle-to-high-end customers well match profiles of our high net-worth members. More importantly, Parkson management team’s open attitude to new commerce trends is respectable. This cooperation will surely expand our service coverage and potential customers in China,” said Richard Rixue Li, Founder and CEO of Secoo, during the contract-signing ceremony.
According to the contract, Secoo’s e-commerce market penetration and Parkson’s mature offline experience will provide mutually strategic compensation. Parkson’s select luxury brands will appear in Secoo’s online and offline stores while Secoo will share high-end best-sellers’ lists and will advise buying channels.
Secoo is also shrewdly eyeing high-end ecosystem construction. Secoo’s luxury product after-purchase services will operate in select Parkson stores. The department store chain, with 44 stores in 31 cities across China, will also grant Secoo access to superior physical locations for further store branching, products pick-up, and luxury community management.
In addition, Secoo and Parkson’s alliance will flexibly allow their own customers to share the two’s premium membership resources including exclusive events and tailored luxury classes. This will likely help Secoo to satisfy rapidly changing market appetites and remain an industry leader despite fierce market competition.
Li expressed his hopes of the partnership, commenting “In the future, Parkson and Secoo will become very intimate partners. To maximize customer experience, we will be continuously deepening our collaborations in areas such as product introductions, premium membership sharing, luxury goods after-purchase services, and offline O2O partnerships.”
In January, during the first corporate annual conference after its IPO, Li declared that the company would then form strategic alliances with at least three leading domestic offline stores. Furthermore, according to the company, tech-led customer experience innovations including intelligent mirrors, motion sensing, and iBeacon registration will also soon see practical implementation in Secoo stores in China.
(Top photo: Richard Rixue Li, Founder and CEO of Secoo. All photos from Secoo)