MyTheresa challenges China's luxury crisis

In a year where the luxury fashion sector faces increasing losses and the Chinese market appears increasingly unstable, MyTheresa has chosen to defy the trend and strengthen its presence in China. The renowned German luxury e-commerce platform has recently announced the launch of a new specific branding for China, including a Chinese name and a mini-program on the super-app WeChat, marking a decisive step towards deeper integration into the country’s digital ecosystem. The new name, “Mei Lin Shi”, phonetically echoes MyTheresa while maintaining a connection to the brand’s core concept: “Mei” means beauty, “Lin” represents selection, and “Shi” signifies world. As highlighted by Gareth Locke, the group’s managing director, these initiatives demonstrate MyTheresa’s long-term commitment to China, at a time when many Western retailers are withdrawing their presence from the region. In recent months, MyTheresa’s main competitors have drastically reduced their operations in China: Net-a-Porter has completely exited the market, while the Chinese branch of Farfetch faces significant uncertainty after being acquired by the American-Korean e-commerce giant Coupang. MyTheresa’s entry into the WeChat ecosystem, an essential app for success in China, represents a shrewd strategic move. But what does a luxury e-commerce platform have to do with WeChat?

Super-apps have been a topic of debate over the past year, especially after both Meta and Elon Musk declared their intentions to develop the first “all-inclusive” super-app for the West. In Asia, however, these apps are already an essential part of everyday life. WeChat in China, Kakao in South Korea, and Line in Japan are platforms that offer a full range of services, from messaging to managing payments, taxes, and even restaurant orders. In China, WeChat is particularly dominant, with the majority of payments, both online and in-store, made through the platform, rendering physical cards almost obsolete. As the Chinese market becomes increasingly digitalized, the launch of the mini-program on WeChat allows MyTheresa to access over a billion users, deeply integrating into local shopping culture and habits. The “Mei Lin Shi” mini-program offers a selection of over 180 luxury brands for women, men, and children, allowing users to benefit from personalized recommendations, live chat support, and secure payments with WeChat Pay. For now, orders will be fulfilled from the brand’s European warehouses, signaling that this move is only a first step in exploring the Chinese market. As Dede Chan Brignoli, MyTheresa’s newly appointed president for Greater China stated: “With the launch of our new Mini Program on WeChat, we will continue to expand our reach to Chinese consumers in an innovative way, addressing their evolving needs. This represents a new and exciting chapter for MyTheresa in China, and we are just at the beginning.”

MyTheresa entered the Chinese market by opening an office in Shanghai in 2022. Despite longer lockdowns compared to the global average, that year China’s mainland GMV grew by 22.5%. Although the company does not disclose specific sales data for the Chinese market, the Asia-Pacific region, which includes China, South Korea, and Australia, accounted for 25% of revenue in 2023. However, in the most recent fiscal quarter, MyTheresa acknowledged that both China and the rest of Asia continue to be affected by macroeconomic uncertainties. CEO Michael Kliger explained to investors that the Chinese market may take another twelve months to fully recover. Despite this, he reiterated that Asia remains a strategic region for future expansion, with a particular focus on key cities like Shanghai and Beijing. In a context where crises and uncertainties have marked luxury fashion and the Chinese market, will MyTheresa be able to overcome these obstacles and set a positive example for brands withdrawing from the Chinese market? If their strategy succeeds, it could trigger a global domino effect, with repercussions in regions lacking a super-app and in those where Western luxury struggles to find fertile ground.