Cross-border online luxury sales on the rise

International online sales of luxury goods increased by 170% year-on-year in August and September, according to sales data from cross-border eCommerce platform eShopWorld.

Brands using the global tech platform have switched much of their focus online in the aftermath of the coronavirus pandemic, which caused many physical shops to close earlier in the year.

The increased sales in late summer follow peak activity in July when cross-border sales of luxury goods were 40% higher than in the lead-up to Christmas 2019 – traditionally the strongest trading period in the calendar alongside the January sales.

Covid-19 and other changing consumer demographics have prompted the luxury market to reprioritise digital in order to maximise sales across the globe, according to eShopWorld, which expects combined gross merchandise value transacted through its platform to double in 2020 to nearly £1 billion.

Indeed, research from Boston Consulting Group released in June suggested before the health crisis eCommerce accounted for 10% to 12% of luxury sales worldwide, but the shift to online this year – and the propensity of younger shoppers to seek both transactions and experiences digitally – means this figure is predicted to be larger in the years ahead.

Tommy Kelly, CEO of eShopWorld, commented: “Luxury companies are having to accelerate their digital presence to compensate for the decrease in in-store shopping.

“To do so they need to create brand-owned online stores if they want greater control and wish to position their products according to their sales strategies, striking a balance between brand experience and the ease of finding products seamlessly.”

He added: “This allows for the merging of the physical and digital worlds to create innovative retail experiences delivered with the seamless service consumers expect from luxury retailers.”

UK-based luxury player Mulberry announced its preliminary results for the year to 30 March, today (5 October), and group revenue was down by 10% year on year to £149.3 million, primarily reflecting a challenging UK market and the impact of Covid-19 at the end of the period. Group revenue was down by 6% before the start of the virus.

Digital sales increased to 24% of total revenue, compared to 22% one year before, and Mulberry said sales generated from international markets continued to grow as a proportion of overall group sales. It expects this trend to continue, and has increased its focus on the fast-growing Asia-Pacific market.

Mulberry also reported as “successful”, the digital off-price website it launched to help drive sales when its outlet shops temporarily closed because of the virus.