Business Model Analysis - Milan Station

This reports analyzes the business model of the Hong Kong based second-hand/unused luxury branded retail company, Milan Station, to uncover the key characteristics that had led them to such great success in the Greater China region.

Company Background:

Milan Station is a well-established retail company specialized in second hand/unused luxury branded handbag and apparel products in Hong Kong, PRC, and Macau. Milan Station was first established in Hong Kong in 2001 by Byron Yiu with second hand trade-ins, where customers can trade-in their bags and accessories for another style or cash, being the key operation as Byron saw the opportunity to capitalize changes in the urban lifestyle where there are limited storage space, increase frequency of changing brands/styles through trade-ins, and growing environmental consciousness. Eventually, Milan Station has expanded its product range from second-hand handbags only to including clothing, shoes, watches, and other accessories, both used and unused.

Milan Station was a great success as a pioneer of the second-hand luxury branded products, and in 2009, Milan Station was ranked number one in both sales value and sales volume amongst the top five luxury branded handbag independent retailers in Hong Kong according to the Synovate Report. Milan Station’s average turnover rate is approximately 7,000 bags (used only). In 2011, Milan Station has gone public and has been listed in the Hong Kong Stock Exchange since then.

Business Model Analysis:

From the various business models that have been studied in class, Milan Station’s business should be classified as the Merchant Model. However, with second-hand products as its operation, Milan Station’s has most of the Multi-Sided Platform (MSP) characteristics.

Milan Station as a Merchant:

Milan Station as a retail company who sells both used and unused product is clearly a merchant business model. This is so because Milan Station has full control of the products,...