E-commerce in China is such a boom industry that virtually every story on the subject on our site this year has been about growth, profits, and potential. But there’s no such luck for Netease (NASDAQ:NTES), which has announced that its high-end fashion store, Luxury163, will not survive into 2012, vanishing off of the web just before midnight on December 31st.
Netease is better known for its 163Mail service or its online gaming titles – but success remained elusive for its Luxury163 site, despite rising incomes in China and growing demand for designer brands. The online mall – at l.163.com – has genuine products from the likes of Hermes, Coach, and Victoria’s Secret; but it apparently was not profitable enough to maintain. The site will go offline on Saturday night, and will maintain customer service for two weeks longer in case any recent purchases need to be refunded.
Despite Netease’s failure, the high-fashion e-commerce party is rocking for everyone else at the moment, with new rivals including 360Buy’s recent move into couture brands, 360Top, Sina’s (NASDAQ:SINA) own ‘Luxury’ online mall, more funding for The Luxury Club, and the late arrival of Gaojie. And that’s to say nothing of VIPStore, Xiu, iHush, or iHaveU.
No very specific reason was given for Netease’s shuttering of Luxury163 except the announcement saying that it’s “due to business restructuring.” It launched in January of this year.
[Source: Techweb - article in Chinese]