China has long been ahead of the curve in terms of developing and adopting new e-commerce technologies and the country is globally known as a leader in retail digital innovation. Home to the planet’s most populous group of digitally savvy consumers, China is currently on track to build the world’s largest luxury market by 2025. The pandemic has accelerated the digitization of the luxury market in China: e-commerce luxury sales have risen over 150% with online penetration almost doubling to 23%. Part of the growth will be fueled by more luxury brands launching online in 2023. However, simply opening an online store won’t be enough to guarantee success. Instead, luxury brands will need to leverage novel technologies that drive engagement and allow them to deliver an entirely new consumer experience online.
On Alibaba’s Tmall Luxury Pavilion, the future of online luxury retail is already unfolding. The platform is the largest online destination in China for luxury brands, enabling them to offer comprehensive and innovative digital shopping experiences to attract new consumers and engage and delight existing customers.
Many luxury brands were traditionally reluctant to embrace digitalization for fear of not being able to deliver the same level of exclusivity and stellar service online as their customers had come to expect in-store, but building a strong omnichannel presence is now crucial. Tmall Luxury Pavilion offers the technology, data intelligence and features that enable leading luxury brands to personalize and enrich the e-commerce experience. By empowering luxury brands to incorporate features such as 3D technology, metaverse integrations, video consultations and post-purchase luxury services, Tmall Luxury Pavilion has reinvented what it means to shop luxury online.
Creating Immersive Shopping Experiences Using Digital Technologies
Dozens of brands have activated Tmall Luxury Pavilion’s 3D technology in creative ways to launch unique and highly memorable experiences for consumers. For example, for Valentine’s Day 2022, Burberry and Valentino both used 3D imagery to share unboxing experiences of iconic items, providing customers with detailed views of gifts they might choose to give loved ones for the holiday. Cartier and luxury watchmaker Vacheron Constantin are among the brands on Tmall Luxury Pavilion that offer a similar 3D product viewing experience online at all times. The technology allows customers to closely examine high-end jewelry, virtually try on premium fashion, zoom in on products and view items from every angle and in multiple dimensions with no special glasses or additional app required.
Perhaps the biggest concern for luxury brands thinking of launching online is the fear that they won’t be able to deliver the same exclusive, lavish experience that their customers so enjoy when shopping in-store with them. Tmall Luxury Pavilion ensures brands can recreate that customer-focused, bespoke shopping journey online by offering one-on-one private luxury salon experiences via livestream. When Cartier wanted to bring the same exclusive and luxurious experience offered in its retail stores to customers online, the brand worked with Tmall Luxury Pavilion to innovate a one-on-one video customer consultation feature that allows sales associates to engage with customers in private sessions. Cartier’s professional advisors can now demonstrate pre-selected jewelry in a digital VIP room, introduce new products to customers and even assist them as they virtually try on products.
This innovative consultation service worked so well for Cartier that Tmall Luxury Pavilion has since made the feature available to other brands on the platform. Burberry recently tapped the functionality to create a private digital salon to give selected customers an opportunity to learn about the brand’s winter coats. Vacheron Constantin’s salon experience, which allows customers to examine products and ask detailed questions, has directly facilitated the sale of a number of exclusive watches to high-level VIP customers.
A Luxury Lifestyle Destination Like No Other
Tmall Luxury Pavilion has been innovating the online retail experience since its inception in 2017 and now serves as a “one-stop shop” for Chinese luxury consumers. The e-commerce destination is part of the Alibaba Group, which serves more than 1 billion consumers annually across its ecosystem in China. Over the past five years, Tmall Luxury Pavilion has grown significantly, helping hundreds of luxury brands launch flagship stores in China with comprehensive and innovative digital shopping experiences that both attract new consumers and keep existing customers highly engaged.
“We have built a platform in Tmall Luxury Pavilion that innovates for digital natives unlike anything else in the world,” says Janet Wang, Head of Alibaba’s Luxury Division. “It’s all about driving the best and most immersive consumer experience.”
The platform now hosts more than 200 leading global names, including brands from all five of the major luxury groups—LVMH, Kering, Chanel, Richemont and Hermès. Tmall Luxury Pavilion helps these brands understand Chinese shoppers by tapping the rich consumer insights and data analytics in the Alibaba ecosystem. The data intelligence helps luxury brands on the platform make informed business decisions and optimally tailor their strategies for the Chinese market, such as localizing product assortments and creating special content and marketing activations for different seasons, holidays and shopping festivals.
While online platforms in other countries may offer a wide range of curated luxury products, none of them compare with Tmall Luxury Pavilion and its ability to create next-level experiences for luxury brands and their customers. The platform’s innovative tools and technologies are setting the global standard for online luxury experiences and enabling brands to build their own flagship stores that keep their marketing narrative front and center while allowing them to offer custom services and immersive digital experiences that drive engagement, conversion and loyalty.
Tmall Luxury Pavilion not only houses the flagship stores of leading brands as diverse as Burberry, Cartier, Max Mara and Ralph Lauren, but also works closely with each to build a complete consumer engagement lifecycle that is unique to the brand.
As Wang notes, “Tmall Luxury Pavilion is probably the most holistic luxury platform in China.”
Each flagship is customized to maintain the brand’s look-and-feel and distinct identity, preserving a sense of exclusivity while reflecting the brand’s storytelling—an especially important factor when it comes to educating consumers who are new to a brand. On Tmall Luxury Pavilion, brands can offer the full product assortment in their online flagship that shoppers might expect to find in their physical stores and can even offer exclusive collections that are only available on the platform.
Tmall Luxury Pavilion’s overarching mission is to bridge the gap between luxury, online and business, leveraging cutting-edge proprietary technologies and innovations to empower brands and enable them to build a 360-degree consumer experience that’s frictionless, immersive and highly personalized. On the back end, Alibaba’s proprietary models leverage insights from across its ecosystem to support the brands on Tmall Luxury Pavilion and enable them to engage customers even more deeply.
Helping International Brands Engage Digitally Native Gen Z Luxury Shoppers
Chinese consumers tend to be exceptionally digitally savvy and to adopt new shopping technologies and experiences more quickly than their Western counterparts. As a leader in digital innovation, Tmall Luxury Pavilion has built a massive audience among Chinese consumers seeking goods of the highest quality paired with a seamless, immersive, digital-first luxury shopping experience.
Between 2019 and 2021, the platform grew its customer base by more than 150% and sales increased nearly 300% as Chinese luxury shoppers turned their retail attention online during the pandemic. Many of these new luxury e-commerce customers were younger shoppers. In 2022, digital natives aged 29 and younger—the age group broadly defined as Gen Z—made up nearly 40% of Tmall Luxury Pavilion customers.
In an effort to connect more deeply with this younger consumer base, in 2021 Tmall Luxury Pavilion collaborated with Balmain, Burberry, Coach, Emporio Armani, La Perla and Longines to roll out the first online digital art gallery in China. In 2022, more than 30 luxury brands released digital collectibles in the metaverse via Tmall Luxury Pavilion through this offering, demonstrating the platform’s ability to meet Gen Z consumers wherever they are on the internet with immersive digital experiences.
Shoppers in the under-30 demographic are now the fastest-growing active user group on Tmall Luxury Pavilion, attracted by its ability to inspire, influence and inform them about the latest trends. While other e-commerce platforms tend to be highly transactional and focused only on the purchase process, Tmall Luxury Pavilion seeks to provide inspiration and much more to shoppers. Younger consumers, especially, tend to view Tmall Luxury Pavilion as a valuable source of information about the craftsmanship and heritage behind the luxury products that they often first encounter on social media.
The New Wave of Luxury
Although luxury has traditionally been a “follower” segment when it comes to digital innovation, luxury brands are now embracing e-commerce as a vital sales channel and a way to connect with consumers in new and exciting ways. Tmall Luxury Pavilion makes it easy for brands to dive headfirst into new technologies and become part of their customers’ culture by better understanding those customers’ wants and needs. Tmall Luxury Pavilion’s sophisticated technology and novel customer experience are on the cutting edge of luxury, giving global CEOs and brands the confidence to engage China’s vast and growing luxury shoppers in new ways.
Digitizing Post-Purchase Luxury Services to Provide Ultimate Ease and Convenience
Tmall Luxury Pavilion has brought the ease and convenience of digital navigation to services that luxury consumers across the globe expect and desire, such as tailoring and repairs, but that have historically required an in-person visit to a physical store. The platform enables brands to offer a “one-stop shop” luxury experience online that is unparalleled both within China and across the globe. Brands on the platform are launching post-purchase services ranging from luggage cleaning and maintenance to coat and shoe cleaning and maintenance (Christian Louboutin’s signature red soles), product exchanges, jewelry adjustment, battery replacement, watch maintenance and more and giving their luxury customers the ability to easily schedule product pickup and delivery through the Tmall Luxury Pavilion platform whenever they need one of these services.
More than 20 brands on Tmall Luxury Pavilion, including Burberry, Chopard, Cartier, Bulgari, Ferragamo, Jimmy Choo, Longines, Max Mara, Tory Burch and Van Cleef & Arpels, now offer post-purchase luxury services such as virtual try-on sessions supported by augmented reality and white-glove customer support. These brands are leveraging the platform’s digital-first capabilities to offer shoppers the same level of premium-quality, individualized service they would expect to receive when walking into one of the respective brand’s brick-and-mortar boutiques anywhere in the world.
Previously, roughly 90% of luxury brands’ post-purchase services (such as cleaning, maintenance, and custom tailoring and adjustments) were solely handled in physical stores. Now, with just a few taps on their phones, customers of brands hosted by Tmall Luxury Pavilion can book almost any of these services online and then have a courier pick up products at their door whenever is most convenient. Shoppers can also track the status of their requested service via the platform in real time—whether it’s a bracelet or ring adjustment, a handbag repair, a shoe cleaning, a product exchange, or some other bespoke service. By integrating these physical services within its digital platform, Tmall Luxury Pavilion is helping brands reinvent the scope of luxury service and the way consumers engage with luxury brands in an omnichannel and digital world.