After a record US$9 billion of sales on Singles Day, the world’s biggest 24-hour e-retail extravaganza, the market in China for flash sales appears stronger than ever. However the one-day feeding frenzy may not the best indicator of health when it comes to the flash sale site model.
Flash sale sites that run year-round as opposed to one day-sales are frequently criticised for the questionable sustainability of their model. Most U.S. flash sale giants have seen steady losses over the last two years. However new entrants to the China market are optimistic, claiming that the simplified experience and access to merchandise makes flash sale sites an ideal model in China’s developing consumer market.
Vipshop, China’s largest online apparel discounter, has seen its stock rise strongly in 2014. The relatively new company has seen sharp growth through a primarily mobile-driven model of discount flash sales. In February this year the B2C retailer also acquired a 75% equity stake Chinese cosmetics retailer Lefeng.com.
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