Luxury beauty brands in the US may feel more comfortable on Sephora than Amazon, but their approach to Tmall in China shows that they’re not opposed to the online marketplace model.
Alibaba-owned B2C e-tailer Tmall has successfully become a premium beauty shopping destination in China, according to Gartner L2’s new Beauty China: Social & E-Commerce Insight report. Looking at brands tracked in the study, 86% of those in the premium category now have official stores on Tmall. The number of beauty labels in the high-end Luxury Pavilion is on the rise, increasing from 22% of premium brands in 2018 to 32% in 2019. Brands in this exclusive, invite-only section of Tmall include Estée Lauder, Givenchy Beauty, YSL Beauty, and La Mer.
The Luxury Pavilion is part of Tmall’s efforts to create a “safe space” for high-end brands on the platform, giving them visibility in a section where they can’t be crowded out by high-volume, best-selling mass brands—or see their products appearing next to diapers and discounted detergent.
Another factor attracting premium brands to Tmall is its wide functionality, allowing brands to add loyalty programs, multimedia campaigns, omnichannel promotions, and livestreaming to their accounts. Seventy-eight percent of all premium beauty brands now have a Tmall loyalty program, which is not too far off from the mass brand rate of 93%. The ones with loyalty are investing in the sophistication of their programs: omnichannel Tmall loyalty adoption is actually higher among premium brands than mass brands—36% of beauty brands in the premium category have loyalty points synchronized with in-store purchases, while only 19% of mass brands offer the same.
While a few premium beauty brands may be starting to come around to Amazon in the United States, their enthusiastic embrace of Tmall points to how important it is for international brands to understand the nuances of a local market.