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Online luxury platform attracts global brands

Brands such as Burberry, Guerlain (LVMH), Hugo Boss, La Mer, Maserati and Zenith are already supporting Alibaba Group’s new Tmall Luxury Pavilion.

By invitation only, the platform aims to offer the same brand exclusivity and tailored shopping experience consumers would have in a brick-and-mortar store.

Its select brands are offering items ranging from clothes and skincare products to watches and luxury cars. Alibaba says the pavilion has taken the first step of a multi-phase launch that will eventually see it offer a complete suite of marketing and omnichannel products.

It is part of a larger “new retail” push by Alibaba that has played out over the past year in initiatives such as the “See Now, Buy Now” fashion show and Hema supermarkets. It leverages elements of online and offline commerce, from consumer engagement to smart logistics, to deliver a seamless shopping experience.

These same elements will drive commerce on the Luxury Pavilion, says Alibaba, not least because they have also served to capture the attention of one of China’s most desired consumer segments, young people.

“Luxury brands increasingly want to use new retail technology and consumer insights to connect with younger consumers, as well as drive business-model innovation,” says Tmall fashion unit leader Liu Xiuyun.

Buying at home

Alibaba’s Luxury Pavilion comes at a time when Chinese consumers are increasingly buying luxury goods at home rather than abroad. This trend is expected to continue, with global consultancy KPMG predicting that half of luxury brand sales in China will be made online by 2020.

Bain & Co has also noted that China in particular “remains an engine of growth” for the category because both the size and spending power of the middle class continues to grow.

To capitalise on this trend, several luxury brands have launched flagship stores on Alibaba’s e-commerce sites including Alfa Romeo, Pernod Ricard, Remy Martin and Tag Heuer.

Alibaba says the Luxury Pavilion is not merely another e-commerce storefront, but a comprehensive, tailored platform within Tmall and Taobao Marketplace, the largest e-commerce platform in China. It allows brands to deliver experiences and services typically reserved for offline shoppers via personalised homepages, customised brand pages, product recommendations and exclusive VIP awards.

Tmall says the brands use the same tools the platform has introduced over the past year to engage consumers, such as augmented and virtual reality. They also can use omnichannel resources that integrate online and offline commerce.

This story first appeared on Inside Retail Asia.

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