The luxury brand Hermès has managed to limit its revenue decline to -6% last year, reaching 6.4 billion euros, thanks to the rapatriation of purchases at the local level and a strong growth in online sales. The brand has recognized the importance of strengthening its digital presence and expanding its e-commerce operations. One significant milestone was the opening of its e-commerce site in China in 2018. This move allowed Hermès to tap into the growing trend of online shopping, which has been further accelerated by the COVID-19 crisis.
Hermès has continued to invest in its digital strategy, launching a dedicated digital store for consumers in the Middle East, particularly in Saudi Arabia and the United Arab Emirates. The brand has also expanded its online platform to new destinations in Asia, including Hong Kong, Macao, and South Korea. These efforts have paid off, with e-commerce sales in the Asia-Pacific region (excluding Japan) experiencing a “very strong” growth of +14.4% and contributing to 46% of Hermès’ revenue in 2020.
To enhance the value of its craftsmanship, Hermès has embraced omnichannel retailing. Its hermes.com platform witnessed significant growth in 2020 and attracted 75% new customers, according to the brand’s annual activity report. In addition to digital initiatives, Hermès has focused on renovating and opening physical stores worldwide, aiming to provide more visibility for segments like jewelry, lifestyle, and makeup. The Leather Goods division currently represents fifty percent of the brand’s revenue, showcasing its importance to the overall business.
In 2021, Hermès intends to continue its strategy of expanding its digital presence and renovating physical stores. The brand recently launched its first flagship online store in Thailand and extended the distribution of its beauty line to other networks, including TMall, the marketplace of Chinese giant Alibaba. Hermès has also reopened several stores globally and introduced new locations in Tokyo, Macao, and Harrods in London. These efforts have paid off, with Hermès achieving historic sales growth in the first quarter of 2021, surpassing both the pre-pandemic figures of 2019 and the first quarter of 2020.
Overall, Hermès’ focus on digitalization and omnichannel retailing, along with its expansion into new markets, has allowed the brand to weather the challenges posed by the pandemic and achieve remarkable growth. The luxury brand continues to be a pioneer in adapting to the changing landscape of the retail industry.
Useful links:
1. Hermès Official Website
2. Alibaba Group Website
