The second luxury industry has entered the era of platform competition pattern
Recently, luxury giants such as LVMH, Hermès, chanel and other luxury giants released the news of price increases of their brands, which caused great concern in the market. For the reasons and impact of this round of luxury goods price increases, the media also analyzed this, but ignored a significant change in the fact that second-hand luxury goods transactions are becoming a new value depression.
Compared with first-hand luxury goods, second-hand luxury goods have greater advantages and flexibility in terms of commodity prices, supply chains and user groups, and the huge domestic luxury goods stock market and the influx of more young consumers also constitute the basis for the active trading of second-hand luxury goods. Among them, the most typical is the development of second luxury e-commerce, in recent years, whether it is the market size, the number of investment and financing, user growth and model innovation, etc., have shown their great growth potential, not only from the second luxury to the second-hand fashion upgrade, but also to accelerate the development of the platform.
In the next few years, China is expected to become the world's largest luxury market, and the rise of the second luxury system has also become an inevitable. This article attempts to explore three core questions: How to view the value of second luxury e-commerce? What are the key points for the decisive victory of the second luxury e-commerce? What is the next step for the industry?
「 01 」
The value of second luxury e-commerce is newly discovered
Since the beginning of this year, major luxury companies such as LVMH Group, Kering Group, Chanel and Hermès have reported global price adjustments. Behind the rise in the price of luxury goods, in addition to the rising cost factors, perhaps more important is that these luxury brands in order to maintain their scarcity and maintain profits. At a time when the scale of China's luxury market continues to expand, this kind of first-hand brand price increase or limited results will often produce spillover effects, so that more people flock to second-hand luxury goods with higher cost performance, and also make new value discoveries for second-hand luxury e-commerce.
Compared with the high price of the first hand, the most direct advantage of the second luxury is the cost performance. For example, a LV cherry blossom powder medium bucket bag, the latest offer on the official website is 15,000 yuan, and the price of the new collar coupon on the red Bollinger platform is 11958 yuan, which is equivalent to 20% off. The rise of second luxury e-commerce can not only allow more people to harvest cost-effective products, but also complete the entry experience of luxury goods. At a time when prices are frequently raised on one hand, it is not difficult to understand why everyone will turn their attention to the second-hand luxury market with higher cost performance.
In terms of luxury supply, the source of new products comes directly from the brand side, affected by the epidemic and the economy, the cost of the brand side from the supply chain is also rising, coupled with the factors of maintaining scarcity such as limited quantity and limited production, so whether it is offline stores or luxury e-commerce platforms, the supply of new products is relatively lacking, and user choices are limited. However, second-hand luxury goods belong to the transactions of the stock market, and the supply of its e-commerce platform mainly comes from a wide range of consumer users and merchants, while the stock of China's luxury goods market in the past 10 years has reached 4 trillion yuan, which constitutes a huge base for the luxury second-hand trading market. Therefore, second-hand luxury goods have more obvious advantages in terms of price and supply.
In addition, from the perspective of changes in the consumer population. For some young consumers, luxury goods still occupy an important position in their hearts, but compared with the past as a symbol of wealth, they pay more attention to whether luxury goods are shows or orphans, and they are more willing to show their personality and scarcity attributes through luxury goods to meet their cultural expression and "self-satisfaction". Especially in the context of consumption upgrading, consumer demand is also constantly extending, especially with the rise of new consumption forces in the post-90s and third- and fourth-tier sinking markets, its demand for luxury or fashion consumption is becoming more and more diversified, which also makes the second-hand luxury goods industry more active.
For the second luxury e-commerce, the extremely high cost performance, flexible and broad supply chain and the rise of young groups that pay attention to personalized consumption have opened up a new blue ocean of luxury consumption and highlighted the effect of "value depression". According to German financial institution Berenberg, globally, the second-hand luxury goods market will grow at a rate of 10% per year in the future, more than twice the growth rate of first-hand luxury goods. Therefore, in the past two years, some vertical second-hand luxury e-commerce companies such as Red Brin, Concubine Fish, Fat Tiger, and Only Second have also obtained new financing, and e-commerce platforms and short video platforms including Taobao, Douyin, Kuaishou, etc. have also directly ended, and the second luxury has become a multi-directional rush of capital, users and enterprises, in order to leverage this expected to grow into a trillion-level consumer market.
「 02 」
The key to the decisive victory of the "five-force model"
Looking back at the development process of the domestic second luxury e-commerce industry, we can see a significant growth and differentiation, in addition to the continuous expansion of market size and transaction volume, the second luxury industry is also accelerating from offline to online, and the pattern of many players and dispersion in the past has gradually concentrated towards the head. In terms of the transaction services provided, from a single bag luxury goods, to more fashion consumer goods and brand expansion has become inevitable, and into the source control, the establishment of appraisal rating pricing standards, improve the user ecosystem and other comprehensive strength of the competition, which tests the company's strategic vision and investment determination.
In the view of understanding the notes, in the face of these changes, the second luxury e-commerce company should explore and practice from the perspective of the whole chain of transactions, and build a "five-force model" such as commodity power, supply power, standard power, service force, and live broadcast power, which is also crucial, which is also the decisive point of future competition.
First, let's look at the power of goods, which is mainly reflected in the richness of goods is the basic indicator of strength, which includes the number of brands and SKUs. In the early days of the development of the second luxury, mainly some heavy luxury brands and bags of goods, but now the mainstream platforms such as red Bollinger, Fat Tiger, Concubine Fish, only the second, etc., both brands and categories have been greatly expanded, like the number of brands on the red Bolling has exceeded more than 2,000, such a scale has become the largest in the industry. Understanding the notes found that in addition to hermès, CHANEL, LV, GUCCI, DIOR, these heavy luxury or hot brands, there are more light luxury, high street, designer original and niche brands on the Red Brin App, such as We11 done, AMI, MO&Co., MLB, BY FAR, Comme des Garcons, etc. These large numbers and different styles of brands bring more abundant and diversified fashion goods to the platform, and meet the aesthetic and individual needs of different users to the greatest extent.
Behind the fullness of commodity forces, it comes from the support of supply forces. In the past, the second luxury industry was more of a B2B model, and some of it was C2C, but the C-end services and transactions were actually not enough to protect. In the future, we can combine the C2B2C and B2B2C models to link buyers and sellers more efficiently, especially through recycling and consignment, and constantly leverage and expand the upstream C-end supply, so as to form a long-term supply force and bring richer categories to the platform.
For the second-hand industry, identification, rating and pricing are undoubtedly the most difficult bones to gnaw, after all, no one is willing to buy fake, or wrong goods, how to standardize has become the most important competitiveness of second-luxury e-commerce. Powerful second-luxury e-commerce companies often take the way of self-built appraisal teams to improve their control of goods. For example, Red Brin has a hundred identification team and dozens of appraisers with an appraisal volume of more than 100,000 pieces, which is also the largest in the industry. In terms of rating and pricing, it is also based on the analysis of massive big data, and a standardized model is established through artificial intelligence algorithms, such as ratings from the highest "new" to the lowest "85 new", which have a detailed basis, and the pricing should comprehensively consider the largest transaction price in the market in recent years and the recent market dynamic price, and obtain the "consignment price range". The establishment of this standard power can effectively solve the problem of poor information, enhance the user's trust in the platform, and make the goods truly what they see is what they get.
In the process of accelerating the online of the second luxury, the performance of its service power is not only to make the purchase decision and transaction of second-hand goods simpler and more efficient, but also to meet the needs of users to buy, sell, learn, use, play and so on, giving second-hand goods more value connotation. A post-90s second luxury player mentioned how he changed from a pure buyer to a role of both a buyer and a seller. "Second luxury is actually a 'smarter way of life', many people like luxury goods, but luxury goods from first-hand to second-hand There is a particularly large difference, a product bought back with a period of time may not like, either put at home waste, or second-hand low-cost resale." But in the process of this constant conversion of business, you will be able to feel a lot of unexpected surprises, experience a new way of life that can be bought and sold. ”
A post-90s luxury buyer Xiaowen also shared with the understanding notes that there was a wonderful experience in visiting offline second-hand stores in Europe before, where buyers will tell you the story, design, concept behind the goods, and the consumption experience and the cultivation of cultural history are very well combined. On the one hand, Young people in China may be eager for luxury goods to bring themselves the emotional value of a higher sense of identity, and on the other hand, they are the pursuit of design, concept and spirit contained in them. At present, on the Red Brin App, there is a special area dedicated to telling brand stories to help users understand the history and characteristics of fashion brands or single products at close range, and this strong sense of substitution story also establishes the resonance between users and brands.
When the basic people and shareholders are crying because of the loss, some classic and limited second-hand luxury goods have also become a new type of investment and financial management. According to the Red Brin consumption list, last year, a user made a net profit of 25,000 yuan by reselling a Hermès Birkin orange leather vintage shoulder bag.
The popularity of live e-commerce in the past two years has also allowed the second luxury e-commerce to quickly catch this express, but each family also has different performances in live broadcasting. For example, Concubine Fish, only second-class luxury e-commerce mainly relies on external traffic platforms to do live broadcasting, and Red Brin has long built a "mall APP end live broadcast + external platform live broadcast" such as internal and external coverage, diversified live broadcast system, through the Red Bollinger Mall APP end live broadcast will empower their own live broadcast power B-end merchants and individual sellers, this practice of establishing a live broadcast ecology, undoubtedly has a stronger and more lasting vitality. Public data shows that as early as 2020, the red Bollinger monthly live broadcast GMV has exceeded 100 million.
「 03 」
Platformization becomes the optimal solution for the future development of the industry
By analyzing the development characteristics of the "five force model" of the second luxury e-commerce, we are more important to discuss the future development trend of the second luxury industry. From the perspective of the trend of Internet development at home and abroad, whether it is e-commerce, search, social, taxi, life services and other vertical industries, there will be or has been a platform pattern, just as Ali Jingdong is to e-commerce, Baidu is to search, WeChat is to social, etc., and in the trillion market of second luxury, a platform-level brand is inevitably needed to lead the entire industry to a standardized development.
In January this year, the State Council issued the "Notice on the 14th Five-Year Plan for the Development of the Digital Economy", which mentioned that it is necessary to promote the healthy and sustainable development of the platform economy, guide and support platform enterprises to strengthen the integration and sharing of data, products, content and other resources, and accelerate the cultivation of new formats and new models. At present, national policies are vigorously encouraging the development of circular economy, and the second luxury industry, as an important part of the circular economy, needs to reshape the business model and competition pattern through platform development.
For the platform development of the second luxury industry, its essence lies in whether it has a unique living water ecosystem, covering the platform side, consumers and merchants. For the internal chain is complete, including rich goods, active users and high-quality services, there is a complete transaction closed loop; the external ecology is rich, and the platform-level e-commerce can attract and support more third parties (individuals or enterprises), and even the upstream and downstream of the industrial chain, which can obtain relevant value and benefits on this platform.
Then, whether the development of the "five-force model" with a platform is the optimal solution for the second luxury industry, we can also analyze it from the following three aspects:
First, for users who buy second-hand goods, their most concerned is whether they can enjoy open and transparent, quality assurance services, especially for such second-hand luxury goods with higher unit prices, they need to have a stronger trust endorsement. However, the establishment of this trust mechanism depends on the integration of the whole process of transaction through the development of the platform, such as providing users with one-stop identification of authenticity, rating and pricing services in the whole chain, which helps to truly break the trust barriers of second-hand goods, make the online trading experience to the extreme, and make the user's purchase decision simpler and more efficient. Second, from the perspective of enterprise development, the platform model is conducive to breaking the competitive status quo and growth bottleneck of "heavy transactions and light services" and helping enterprises establish core competitiveness.
At present, the development status of the second luxury e-commerce is more to promote transactions and accelerate the sale of goods, including building an online platform, doing live broadcasting and even expanding stores offline, so as to increase the transaction contact points with users and expand the scale, but behind it is a set of commodity standardization service processes and after-sales service systems with "appraisal rating pricing" as the core, which needs to be further standardized. The process of platform establishment is to make long-term investment and innovation in the user-centered whole process experience, unify front-end transactions and back-end services, especially refine and standardize the service system, so as to establish a good user reputation to promote the final transaction.
At the same time, the growth scale of the second luxury is often limited by the supply capacity of the supply and the richness of the SKU, but the platform can maximize the aggregation of B-end and C-end sources, open up online and offline transactions, so as to form a full category, full brand coverage, drive more active and diverse user consumption behavior, and finally break through the original growth bottleneck. With the expansion of the scale of the platform's second luxury transaction, it will further feed back the improvement of the service system such as appraisal, rating, pricing and after-sales service, so that the continuous improvement of the platform performance service capability will become the core competitiveness and drive the enterprise to achieve growth flywheel.
Third, from the perspective of industry development, platformization can improve the current decentralized and non-standard industrial ecology, and establish a new understanding and value of the external world for the second luxury industry.
The supply of second-hand goods is highly dispersed and varied, coupled with the information gap between buyers and sellers, the lack of sufficient reference like new products, how to achieve standardization has become the biggest pain point in the industry. The platform can be optimized and upgraded by going deep into the entire industry chain, including the upstream supply side, the identification, rating, pricing and sales channels of the midstream, and the downstream end-user services, all of which are systematically sorted out through the whole process, and finally explore the establishment of a set of professional, authoritative and reliable standardized services to enhance the unity of the entire industry standard and operate more efficiently.
In addition, second-hand luxury goods belong to the typical non-standard industry, and once its standardization, standardization and process are formed, it will also greatly enhance the trust of the whole industry, highlight the brand effect and long-term value of the second luxury industry, and drive more people to participate in this circular sustainable lifestyle, and ultimately make the second luxury industry ecology an important pole of the circular economy.
It can be said that the "non-standard" characteristics of second-hand goods and the dispersion of merchants make it difficult to establish a standardized transaction experience. The development of the platform can concentrate resources to break the previous scattered and repetitive investment, innovate the entire second-hand industry chain with the standardization of the whole process to improve efficiency, truly make the entire market bigger and standardize, and also let the value of the platform be released to the greatest extent.
【Conclusion】
Whether from the perspective of development stage or model innovation, the second luxury industry has entered the era of new competition patterns at the platform level and non-platform level, and Red Brin's current heavy investment in "supply chain + service" is also in line with the long-term value of this platform development. The support of circular economy policies, as well as the expansion of categories and the growth of C-end users, will also promote second-hand luxury goods to a broader second-hand fashion, on this long ramp, the continuous investment of the platform also constitutes a thick snow, and ultimately leverage the trillion blue ocean market, to achieve the unity of economic value and social value.