It’s Just a Short Time Before Online Stores Cease to Sell Luxury Brands on Their Platforms
If you own an online store that sells luxury brands, coming to terms with the reality that luxury brand manufacturers are planning to shut down eCommerce stores that sell luxury products is almost impossible.
While one can argue that this is a move by brand manufacturers to protect their image; from an economist perspective, this will have a negative impact on startups and anyone planning to launch a website.
Just recently the Court of Justice of the European Union, abbreviated as CJE was listening to a case by the German’s Coty Company, which is a subsidiary of the USA’s beauty product manufacturer Coty Inc. The company was unhappy about how retailers sell its beauty products on their online store and want them to cease. There has, for a while, been a standoff between luxury brand makers and retailers that saw the matter taken to court.
On their side, luxury brand manufacturers claim that they have a right to select whom they want to distribute their products, and this will only work to protect their luxury image and exclusivity. The manufacturers also hold that most of these online stores sell cheap and fake alternatives and would not want their brands to be mixed with such low quality and fake commodities. Mass Market Product Retailers have also taken sides, a move that is set to see the downfall of many ecommerce stores. Ecommerce stores community, on the other hand, has shunned the allegations by brand retailers, claiming that those are only blanket bans which are anti-competitive. They warn that it is the consumer who gets harmed by such restrictive distribution deals. They hold that everyone should be given a fair opportunity to do business online without unnecessary restrictions.