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ALIBABA’S HIGH-END TMALL LUXURY PAVILION OVERTURNING THE RULES OF DIGITAL RETAILING

 

A veritable revolution in the luxury markets is currently underway, largely hidden from the Western consumers who dominated the space for most of the past 100 years. It is taking place in Asia, and more specifically in China, and it is being driven by digital retailers, operating online rather than in a brick-and-mortar environment.

What is being achieved is possibly best illustrated by a venture of the one of the world’s largest online merchandisers today, the Alibaba Group. It is called the Tmall Luxury Pavilion.

It was launched in 2017 as a new section dedicated specifically to premium and luxury brands within Alibaba’s business-to-consumer site Tmall. The initiative was part of a broader bid to advance the online giant’s new retail initiative, reaching out to the China’s fast-growing community of super wealthy online shoppers.

Tmall.com, which formerly was known as Taobao Mall, is a Chinese-language business-to-consumer ecommerce platform. It began operating in April 2008, and in November 2010 launched an independent web domain, Tmall.com, to differentiate listings by its merchants, who are either brand owners or authorized distributors. Within 10 years it was attracting close to 800 million active users each month.

Tmall Luxury Pavilion aims to develop the rarified top percentile of the client base, and right at its launch featured a wide range of apparel, watches, beauty, jewelry and cosmetics, and even luxury automobiles.  Many of the labels have already had electronic flagship stores on Tmall.

A CUSTOMISED SHOPPING EXPERIENCE

To keep it exclusive, Alibaba made the Tmall Luxury Pavilion an invite-only space. Out of Tmall’s 500 million total users at the time, it selected a limited number of customers who it gauged were super-wealthy, or were members of APASS, which is a Tmall members club for top online shoppers based on their annual purchasing records.

For its users, Alibaba wanted the Tmall Luxury Pavilion to offer a customized shopping experience. Based on the personal information that the company gathered, it created personalized homepages, customized brand pages, product recommendations, exclusive VIP awards and individual post-purchase customer service.e.

Tmall Luxury providesa platform for premium and luxury brands within Alibaba’s business-to-consumer site Tmall. It reaches out to the China’s fast-growing community of super wealthy online shoppers.

From the outset, the platform was designed to be interactive, often mimicking the in-store shopping process, using technologies such as virtual and augmented reality. Customers can interact with sales assistants in real time, and at an instant receive detailed information about the products they are considering buying.

Consumers are able check and compare items, also can return if they are not satisfied with their purchase.

The platform has also been keen to partner with the brands, bringing to a wider audience experiencing that ordinarily were provided to a select few, and only in major population centers. In March last year, the Tmall Luxury Pavilion joined forces with Shanghai Fashion Week, livestreaming the full roster of runway shows.

The iconic luxury fashion label Diane von Furstenberg was one of the brands that moved its catwalk online, and its head of business development for Asia-Pacific noted later that the brand had never before seen such an effective way to gather authentic customer feedback in such a short tim

In January 2020, premium jewelry brand Cartier flagship opened the Tmall Luxury Pavilion. It became the first Richemont-owned company to establish a standalone presence on the site.

 

159 PERCENT GROWTH IN ONE YEAR

In the fewer than four years that it has been operating, more than 200 brands and designers have joined the platform. Balmain, Cartier, Ferragamo, Prada, Chloé, Saint Laurent and Van Cleef & Arpels have all opened digital storefronts, as have 17 LVMH brands, including Rimowa, Marc Jacobs, Dom Perignon, Kenzo, Hennessy, Dior Beauty, Guerlain, Givenchy, Tag Heuer and Zenith.

The COVID crisis was a somewhat fortuitous for the Tmall Luxury Pavilion, as many consumers who otherwise would have preferred to shop in-sore, and quite possibly in a country other than China, took their business online. Alibaba’s high end brand platform reported 159 percent growth in sales in 2021 through the end of July, compared to the same period in 2020.

In so doing, the Tmall Luxury Pavilion also put pay to the argument that the online sales environment is exclusively for lower end and moderately priced merchandise. According to Jing Daily, more than 340 items priced between $7,710 and $77,100 were sold during June, including two Vacheron Constantin watches, each priced more than $60,000.

Indeed reported, Jing Daily, sales data from June indicated that when high-end luxury items were offered at premium prices on the Tmall Luxury Pavilion, they managed to outsell the more moderately priced items.

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