Gartner L2 data shows that the Alibaba-owned e-tailer’s luxury efforts have paid off big time in the past few months. More than half of luxury fashion brands in the Luxury China Index now operate official flagships on the platform, up from only 27% a year ago.
This comes after an influx of American accessible luxury labels to the platform starting in July, with Michael Kors, Tory Burch, Coach and Kate Spade all launching Tmall flagships. Meanwhile, Net-a-Porter’s Tmall flagship launched on Sunday with a roster of over 130 luxury brands.
Several of the brands opening flagships are demonstrating a newfound enthusiasm for Tmall. Coach, for example, has had an on-again, off-again relationship with the platform, exiting Tmall in 2011, opening a new shop in 2015, and then leaving again in 2016. Michael Kors has had a dramatic change of heart about Tmall after calling Alibaba its “most dangerous and damaging adversary” in a 2016 letter to the International Anti-Counterfeiting Coalition.
This transformation from “adversary” to ally has come about as Tmall has aggressively developed its luxury credentials. In addition to creating more counterfeit-fighting measures over the years, the e-tailer has been adding more features to its Luxury Pavilion section introduced in 2017, including more content and a VIP loyalty program. It also recently revamped its flagship store look and functionality with its Flagship Store 2.0, offering brands the option for customized designs, personalized content, AR, VR, and 3D features, clearly displayed loyalty program points and omnichannel promotions.
Net-a-Porter’s new Tmall shop is promoted through the Luxury Pavilion homepage, and is incentivizing users to invite friends through a lottery giveaway promotion. The luxury e-tailer’s Tmall shop offers a content-rich experience with editorial fashion videos, and customers have access to something its main site shoppers don’t: a loyalty program. Users receive 100 points just for joining, and can also earn points from writing product reviews.
In the luxury sphere, Tmall has been most appealing to the accessible segment and smaller emerging labels. Net-a-Porter’s Tmall brand roster skews toward the independent, young, and buzzy, with names like Jacquemus, Proenza Schouler and Off-White. Luxury giants found on Net-a-Porter’s main site including Gucci, Fendi and Saint Laurent are not sold in the new Tmall flagship, and Gucci’s CEO has previously stated that the brand is shunning e-tailers in China for the time being.
But there are many luxury heavy hitters already selling on Tmall, like Burberry, Bottega Veneta and Valentino. Brands under the umbrella of Net-a-Porter’s parent company Richemont can also be found in the luxury e-tailer’s new Tmall store, including Cartier, Panerai, Jaeger LeCoultre, Chloé, Dunhill, Montblanc and IWC Schaffhausen. In addition to Kering, several LVMH brands sell on Tmall, while brands wary of fashion e-commerce altogether, like Chanel, are willing to sell their more accessible beauty lines on the platform.
The jury is still out on whether the biggest mega-brands like Louis Vuitton and Gucci will warm to Tmall. Online luxury market share in China is still up for grabs as only 10% of Chinese luxury purchases are estimated to take place online in 2020. But with 700 million users on Alibaba platforms, Tmall is a key tool for product discovery among accessible and emerging luxury brands that are tapping into the brand building, merchandising, sales and traffic opportunities it offers.