A Luxury Discovery Zone
Strange Days, On Film
Most recently, the Pavilion launched a monthlong series of events to mark its anniversary that included its first shopping festival designed specifically to appeal to young luxury shoppers in China. Earlier feature launches include a membership loyalty program, tools for livestreaming—which has become an essential way to communicate directly with consumers in China—and interactive experience capabilities such as virtual 3D pop-up stores, augmented reality functionality and personalization features.
Alexander Wang, Balenciaga, Cartier, Chopard, De Beers, Dunhill, Golden Goose, IWC Schaffhausen, Jaeger-LeCoultre, Marc Jacobs and Salvatore Ferragamo are among the more than 50 luxury and premium brands to have opened flagship stores on the Pavilion in recent months.
They join nearly 200 other leading labels that have launched on the platform over the past three years, including Burberry, Kenzo, MCM, Maserati, Qeelin, Tag Heuer, Valentino and Zenith. Last September, Net-a-Porter, the e-commerce platform owned by Swiss luxury group Richemont, opened a flagship on the Pavilion, giving shoppers access to labels such as Balmain, Chloé, Jimmy Choo and Tom Ford.
“There is no better place in the world than China to tell your brand story, thanks to the ecosystem that has already been in place,” said Mauro Maggioni, Asia-Pacific CEO of Golden Goose. “The boundaries are no longer the shopping mall, the city or the province. The boundaries are the consumers, so a consumer-centric strategy is of paramount importance.”
Why Having a Presence in China Is Crucial for Luxury Brands
Chinese consumers are driving growth of the global luxury market. They accounted for 90% of the segment’s growth in 2019, according to a recent study by Bain & Company, and will be responsible for nearly 50% of global luxury sales by 2025, the consultancy estimates.
Given the pandemic, these consumers are increasingly shopping for luxury goods at home in China rather than when traveling abroad, and they’re shopping for them online more often, too. In fact, Bain expects e-commerce to account for 30% of luxury goods sales by 2025. In addition, a Boston Consulting Group study published in June found that, due to limitations on international travel, 73% of Chinese consumers surveyed will spend at least half of what they had planned to spend on luxury goods overseas at home in China instead in the next 12 months.
Notably, the average age of luxury consumers in China is 35, about 10 years younger than in other major markets around the globe, according to an earlier Bain report, and Alibaba’s own data show about 80% of luxury consumers on the company’s platforms in China are 35 years old or younger.
To communicate directly with these Gen Z and young millennial luxury consumers, brands must become true digital champions—and Alibaba and Tmall are continually evolving their offerings to enable brands to capture, and keep, the attention of these demographics.
Christina Fontana, Head of Fashion and Luxury for Tmall, U.S. and Europe. Courtesy Image.
How Tmall Is Enabling Luxury Brands During the Pandemic
The COVID-19 pandemic has spurred luxury brands to accelerate their digital transformation by expanding their e-commerce operations and adopting new online technologies that support customer-centric strategies. Tmall’s array of digital marketing and content offerings are helping luxury and premium brands succeed in China, despite the challenges the current crisis presents.
Allbirds Uses Alibaba Technology to Offer Personal Service via Video Chat
Eco-friendly shoe brand Allbirds had just celebrated the first anniversary of its launch in China and on Tmall when the coronavirus struck. The San Francisco–based startup knew it needed to innovate quickly to minimize disruption to its business. With four brick-and-mortar stores in China, as retail foot traffic fell and the brand’s e-commerce sales on Tmall rose, Allbirds realized it had an opportunity to use technology to engage more with customers.
“We had a lot of people contacting our customer-experience team in Shanghai, mainly via online chat, and thought it would be interesting to connect consumers and our store staff in real time over video,” said Erick Haskell, president of International at Allbirds.
The company leveraged technology from Alibaba to identify the sort of customer queries coming in via online chat that might be best answered by an in-store associate via live video, such as “What do I wear Allbirds shoes with?” Customers could then choose the video option to see what clothes the staff were pairing with their Allbirds as well as different shoes and colors. Video chat has proven so popular that the brand is now working to make it a permanent part of its offering.
Tmall Livestreams DVF’s Shanghai Fashion Week Presentation
When Shanghai Fashion Week and Tmall joined forces in March to livestream the full roster of runway shows—all of which were shared virtually for the first time due to safety concerns amid the pandemic—iconic luxury fashion label Diane von Furstenberg (DVF) was one of the brands that moved its presentations online. DVF was amazed by the engagement its Fashion Week livestream generated and noted that it had never before seen such an effective way to gather authentic customer feedback in such a short time.
Gabby Hirata, DVF’s head of business development for Asia-Pacific, said of the experience, “When we learned about the opportunity to be part of the digital Shanghai Fashion Week, we knew instantly that we should participate because, as a brand, we need to constantly innovate in order to create a robust DVF digital community….Alibaba has been crucial in that endeavor.”
Tmall’s Flagship Store 2.0 Powers Personalization and Gamification for Michael Kors
Michael Kors used Tmall’s Flagship Store 2.0 solution to design a digital pop-up experience for Chinese consumers when the coronavirus upended the brand’s plans for a series of live events. Visitors to the pop-up could take a short personality quiz and receive a message and product recommendation from the brand’s namesake founder himself. Customers could then make their items uniquely their own by hand-painting them using brushes and colors created by Michael Kors and Angelus Paints, a California-based leather-paint company.
Alibaba Brings New York Fashion Week to Online Audiences in China
To help US designers showcase their collections to new international audiences during the pandemic, Alibaba partnered with IMG to stream all of the September 2020 New York Fashion Week: The Shows in China. Consumers in China could view all of the NYFW events and presentations across Alibaba’s Youku video-streaming platform and Taobao and Tmall e-commerce platforms, which together reach an audience of nearly 900 million. The experience brought the shows to life for Chinese consumers by letting them easily access and shop at participating brands’ flagship stores on Alibaba’s platforms as well as watch behind-the-scenes footage and designer interviews produced by IMG.
“Alibaba is the perfect partner to introduce American fashion brands to new consumer audiences in China and around the world,” said Jennifer Taylor, vice president of global consulting and business development for IMG’s fashion events and properties division. “Alibaba’s digital technology and e-commerce expertise will give all the designers participating in NYFW: The Shows the opportunity to accelerate their business growth by showcasing their collections to hundreds of millions of fashion consumers,” she said.
Just three years after the launch of the Tmall Luxury Pavilion, the question isn’t which brands are on it—it’s which are not.
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