Lap of luxury
Updated: 2014-12-26 14:04
By Hua Yang(China Daily USA)
Luxify allows the listing of luxury goods within 10 pre-selected categories, including sports cars, yachts, jewelry, handbags and fine wines.
Florian Martigny (left) and Alexis Zirah offer a marketplace for new, vintage and pre-owned luxe goods. Provided to China Daily
A pair of ingenious Frenchmen make buying and selling luxury of all shades a cinch with their innovative startup. Hua Yang reports.
After more than a decade in the financial industry, Alexis Zirah and Florian Martigny decided to give up everything to strike out on their own - in a field where neither had any business experience: luxury.
"The luxury market in Hong Kong has been dominated by offline distribution channels such as pawn shops, stores, galleries, specialized second-hand shops and dealerships. If you want to buy luxury, it's quite easy. If you want to sell it, it's a totally different story," says Zirah.
With ambitions of removing the pain points of the industry, the two Frenchmen set out to use the Internet to make transactions easier and sell to a broader customer base.
Luxify, their Hong Kong-based startup, provides an online-to-offline marketplace for users to buy and sell new, vintage and pre-owned luxury goods.
"The rise of the Internet and the use of smartphones give people new opportunities to sell stuff," notes Zirah.
"We let our users list their stuff online. But it can be really difficult for consumers to trust they are getting a fair deal if they don't get a chance to see the stuff. That's why we bring the transactions offline."
Free listing for a start
Here is how Luxify works. Sellers sign up and upload photos of their merchandise. When an item clears the screening process, it will be listed on the site. At the same time, a listing fee will be charged. The fee is calculated in proportion to the value of the item sold, starting off at 15 percent for items valued at under HK$35,000 ($4,515) and 5 percent for those above HK$155,000. However, listing is free for the time being.
Sellers signing up for Luxify can also create a profile to delineate their style. Vendors are in complete control of their own sales and can list as many items as required for up to 120 days.
As for buyers, if they like what they see on the site, they need to contact the sellers to make the purchase. Goods cannot just be bought online.
This new model makes consigning accessible to all. "Unlike the limited traffic of a physical store, Luxify reaches consumers around the whole region," Martigny says.
The site only allows the listing of luxury goods within 10 pre-selected categories, including sports cars, yachts, jewelry, handbags and fine wines.
"If you look at the luxury sections of eBay and Taobao, you can find almost everything, like pens, tools, etc. The user experience is not that nice," explains Zirah. "We only offer luxury products and combine all luxury products into one platform."
So far, Zirah says, the quality of most pieces sold via their site has been up to par as user reviews have been quite positive. However, the startup cannot essentially prevent knock-offs and fake or misrepresented items from being listed on the site.
"Though we haven't had such issues so far, it is a risk that most businesses have to take. But we do our best to screen users and push the sellers to provide as much information about the items as possible, such as receipts and original dust bags," says Zirah."We encourage consumers to go and meet the sellers before buying."
Apart from allowing peer-to-peer interaction, the startup works with different experts in Hong Kong to offer a third party to verify the listed items. A concierge service is available to assist buyers in appraising the items and offer prices.
Zirah notes that some smaller operators and sellers have signed up and are using the Luxify site to reach buyers: "Listing items online can help them eliminate large marketing expenses. And they take control of all the parameters themselves."
Luxify also hosts private sales for unique luxury goods they source on their own. Among firms the startup has been working with is Pleyel, a French piano maker and the world's oldest in operation. Luxify has received the rights to import the pianos and auctioned 13 of them, valued around HK$1 million each.
Cars driving traffic
Launched in November 2013, Luxify has averaged 600 to 700 visits per day during the past year, despite little marketing. Zirah says sales have grown steadily month on month. Users love the experience, he explains, because it helps them convert unused or unsold second-hand luxury items into cash.
"Our cars and bags categories have driven the most traffic and sales volume," Zirah says, adding that the best-selling segment is cars, followed by bags.
Martigny told China Daily that the startup was backed by angel funding in Europe at the very beginning, and some established investors in both Asia and Europe have come on board in the past few months.
Luxify is expanding fast, with new offices in Singapore and London to be up and running by early 2015. "If consumers cannot get what they want in Hong Kong, they can look into other locations. That's the whole idea," Martigny says.
Plans include continuing to expand the cross-border business and become a global luxury marketplace in the future.
Says Zirah: "We have seen a lot of cross-border synergies. For example, professionals in London want to tap into the Asia market and vice versa. We want to address that concern."
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(China Daily USA 12/26/2014 page7)