Chinese Luxury Gray Market Structure

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So, the boutique they own, was it in Italy or Taiwan?

This model is applied all over the world. It's the same everywhere. This was the Daigou market overview estimation I did in 2018. Considering the pandemic, if you calculate the overall changes from 2018 to now, I think it wouldn't have changed much. In 2018, the EU market size was about 42 billion renminbi. Specifically the luxury product market, was approximately 42 billion renminbi back in 2018. Then, boutiques directly run by the brand or where the brand gives rights to local distributors should account for 12 billion.

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So, the boutique they own, was it in Italy or Taiwan?

In the multi-brand sector, where they buy directly from the brand and typically have a mix of 100 to 300 brands, this accounts for about 24 billion renminbi. And there are two billion from outlets.

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Yes, he sold on Farfetch and Cettire and other usual platforms. So, you're saying that for Italian boutiques, 60% of their sales typically go to the gray market?

Yes, between 60% to 70% go to the gray market. For large-scale boutiques, that's the case. For smaller ones, you might see this screenshot as another case study from a boutique that owns many brands. They own 64 brands that actually sell. However, under these 64 brands, they have around 300 brands in total.

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