Chinese Resale Site’s 40% Discounts Erode Luxury Giants’ Profits
- Online platform Dewu is booming off the parallel import trade
- LV goods sold on Dewu amount to 14% of total LV China sales
At Kering, revenue in Asia Pacific declined 22% in the first half of the year, mainly driven by worsening performance in Greater China, compared with 22% growth in Japan.
Photographer: Qilai Shen/BloombergLuxury powerhouses like LVMH and Kering SA are facing a fast-growing foe in China: a gray market that sells brand-new, authenticated goods procured in other countries for discounts of up to 40% on the mainland.
Currency exchange fluctuations and Chinese shoppers’ growing price-consciousness has given new life to arbitrage in luxury goods, dominated by an e-commerce platform called Dewu. The value of Louis Vuitton goods sold over Dewu grew 11% to 2.6 billion yuan ($358 million) in the first half of 2024, compared to the same period last year, people familiar with the matter said.