Vip.com uses flash sales to make market impact

A billboard advertising Vip.com in Shanghai. [Yan Daming/for China Daily]

It was quite a coup for startup Vip.com.

The e-commerce company announced it would sell products from Make Up For Ever, a high-end cosmetics brand and part of global giant LVMH, on its platform.

But then, this was just another important step for the Guangzhou-based group as it expands its luxury label portfolio.

Vip.com is dedicated to selling famous luxury brands involved in fashion, beauty goods, luggage and perfumes.

"Compared with other online luxury platforms, our company is built around competitiveness," said Hong Xiaobo, chief operating officer of the company.

The online retailer has a unique way of operating by using "virtual outlets" and "flash sales". Every morning at 10, the website offers 12 to 17 luxurious brands at big discounts.

Each product is on sale for three to five days.

This business model is common in the United States but relatively new in China's major cities.

Launched in 2008, Vip.com is one of the few online e-commerce platforms involved in "flash sales" here.

"Another advantage of our website is that we offer a wide range of luxurious brands, including popular labels from overseas markets," said Hong. "These might not be familiar to domestic shoppers."

Vip.com has put together various deals with marque names, agents and fashion buyers.

A company report showed the e-commerce startup generated revenue of 17.52 billion yuan ($2.63 billion) in the second quarter, up 30.3 percent year-on-year.

It also made a profit for the 19th straight quarter but declined to give detailed financial figures.

Even so, Vip.com has had to tighten its security process after media reports claimed that customers had been sold fake goods.

"Some suppliers may provide counterfeits to increase profits," said Chen Tao, an analyst at internet consultancy Analysys in Beijing.

"If Vip doesn't strictly control its products, fake ones are likely to appear on its e-commerce platform," Chen added.