Every New Step of Hermès Towards Selling Birkin Bags online.

Title:                 Every new step of Hermès towards selling Birkin bags online.

Author:                 Xinyuan WANG

Data source:         Published sources

Topics:                 Hermes; Luxury; Challenges; Gen Z; Digital disruption; Chinese market

Abstract:

Founded in 1837 in Paris, French luxury brand Hermès specializes in leather, lifestyle accessories, home furnishings, perfumery, jewelry, watches and ready-to-wear. Since it was a harness workshop dedicated to serving European noblemen, Hermès never intended to cater young generation’s preferences. As a core element of Hermès, equestrian has always been considered an aristocratic sport. That’s one of the reasons why we can say that Hermès has positioned the brand as a symbol to divide social classes. There is no doubt that Hermès' attitude comes from the continuation of this brand positioning and the insistence on the scarcity of luxury goods. It does not want to lose the wealthy consumers, whose loyalty is originally the favorite of luxury groups. However, today these consumers are more rational and can no longer provide incremental growth to the brand. Till now, Hermès is still an excellent company, but in the fast-changing fashion industry, how to balance the old and new consumers with the best interests is the biggest headache for the brand.

Since 2017, Hermes’ attitude towards e-commerce has begun to loosen. In Europe and North America, customers can purchase on brand’s website. In China, the brand used mini program and online pop-up store on WeChat to interact with customers. In October 2018, Chinese e-commerce website went online. The digitalization of this brand of more than 180 years has a prudent step while it seems that every new step of Hermès towards selling Birkin bags online.

The case discusses (a) the challenge in the new age brought by young generation and digitalization (b) Hermès efforts to face the changing consumption concept (c) its dilemma and changing attitudes towards new trend in luxury industry (d) increasing competition from peer brands which are catering young generations’ preferences and others (e) the future.

Settings:         Global, China, Luxury, 2016 till now.

Every new step of Hermès towards selling Birkin bags online

Introduction

Sitting in the meeting room in the Hong Kong Plaza, Alex Dumas continued his speech to managers in Shanghai office : “ We should consider the cooperation with the e-commerce platform of JingDong.”

Looking at the financial report of the last quarter, Axel was quite satisfied with the results in Chinese market. Chinese consumers have a near-crazy obsession with Hermès. An online shopping sharing community Small Red Book, may gathers the world's highest density of Hermès consumers. People not only share the most cost-effective buying methods here, but also discuss Hermès' famous allocation system, and more to show off the Hermès handbag collection.