Editor’s Note: Traders highlights the business of global trading by showcasing extraordinary individuals worldwide who are trading goods and services across borders.
In China, the demand for luxury goods has never been bigger, but connecting Chinese shoppers with designer goods isn’t always easy, says Jacqueline Lam, cofounder of Mihaibao, a company that’s looking to bridge the gap between the top Western designer brands and hungry consumers in the East.
“It’s very difficult for people to buy from Western websites in China,” explained Lam. “It’s not just the language barrier, the shopping experience is entirely different: the foreign servers slow things down, you can’t pay in Yuan and that’s before you face customs and import duty.”
And demand for expensive goods in China is growing exponentially, with one report suggesting that China will account for 20% of the global luxury sales in 2015.
You might think it’s already been done, with Chinese online retailer Xiu and the host of glitzy designer shops that have opened in China’s large cities. But last year, there were reports that those same shops were slashing their exorbitant prices as consumers favored making trips abroad to buy direct and avoid the high taxes at home.
In addition, Mihaibao doesn’t have the expense of foreign buyers shopping for a set list of products, like Xiu does. Instead, Lam’s company has no inventory to speak of, just a group of software and data engineers.
“We’re a tech company,” Lam clarified. “Our engineers manage data on currency so people can pay in Yuan, the latest trends so customers can keep up with the latest fashion and all the placement and orders are done automatically.”
Chinese consumers can now pick the products they want directly from the website and the rest is done automatically by the systems Lam put in place – from calculating live prices and import costs to arranging the delivery. On top of that, Mihaibao believes its data knowledge has enabled it to exploit key trends not just for consumer demand but also to help the big-name brands market the right products to Chinese customers.
“We have studied the online shopping experience in China – it’s nothing like the West,” Lam said. “We’ve changed it by making it transparent, easy to use and adapting our website to the way China shops.”
She continued: “Not only can we tailor the Chinese shopper’s experience but we can also help brands target the people that have created demand for a particular product – we know how the Chinese shopper thinks.”
The sky’s the limit
Lam, 28, was born in China and later moved to Denmark as a teenager. She continued her university studies in the United Kingdom and went on to work for retail data giant Dunnhumby, before starting Mihaibao in 2014.
Whether it can fill the gaps the luxury brands and e-commerce sites have missed remains to be seen but expansion is on the cards with a fresh round of investment and help from the UK government’s Trade and Investment department.
“We started with luxury handbags but we’re going to meet the demand for other luxury goods in beauty, baby care, wine, art and furniture,” Lam said. “People in China want Western goods – they associate it with a better life and sophistication – and if you have the money you’ll buy from the West, not from China.”
Lam also hopes to help eradicate the “gray market,” where Chinese people come into the country with products they’ve bought abroad – something the Chinese government is working hard to stop.
She said: “This trend of people coming back with gifts from overseas trips has been going on for ages … we want to take out the hassle so people can buy cost-effectively without having to bother their family members in the West.”