Jessica Liu, Tmall's president of fashion and luxury, speaks at a forum in Shanghai.

SHANGHAI — Both Alibaba’s Tmall’s Luxury Pavilion and JD.com’s Toplife site unveiled new initiatives and partnerships this week, a sign that China’s e-commerce giants have their sights firmly set on capturing the country’s young, and growing, market of online luxury consumers.

For it’s part, Tmall held a forum in Shanghai on Wednesday for luxury brand representatives, revealing the next phase of its app-within-an-app Luxury Pavilion infrastructure — the launch of the Luxury Pavilion Club.

Since its launch in August 2017, the Luxury Pavilion, which can be accessed through Alibaba’s Tmall and Taobao apps, has seen 45 brands — including Armani, Burberry, Hugo Boss and La Mer — sign on to create their own stores through the platform. The Luxury Pavilion Club will be an exclusive membership program in which “high-potential” consumers are tapped for membership and gain access to more personalized service and promotions.

The two-tiered club membership offers flexible payment options, purchase priority and door-to-door returns, making the purchasing process easier for all members. They are invited to join the club if they meet certain criteria (for example, have browsed or purchased luxury products, are Tmall Super Members or very active users). Premier members will also have access to exclusive events and the opportunity for fans to meet celebrities.

According to a McKinsey report, Chinese customers are expected to contribute 781 billion yuan, or TK, to the global luxury market by 2020, while Tmall data shows that digital savvy Chinese Millennials represent 80 percent of the total number of Luxury Pavilion users. In her presentation at Wednesday’s forum, Tmall’s president of fashion and luxury Jessica Liu introduced six “personas” of the platform’s luxury shoppers, which have been developed using Alibaba’s big data operations.

Consumers aged 18 to 29 were split into “personas” including “Hedonist” (accounting for 10 percent of luxury consumption on Tmall) and “Explorer.” Both categories have an average age of 26 and the Explorers still haven’t reached their spending potential – they make up 39 percent of the population at large, according to Alibaba, but only 18 percent of luxury consumption, with their most popular categories unsurprisingly including beauty and shoes.

In all, according to Liu, 24 percent of consumers account for 64 percent of luxury sales on Tmall.

“My media team no longer uses the traditional definition of this age, top-tier cities, college educated, I demand my team give me persona metrics and run the data to see what show they are watching on Youku, what brands are they associating with,” Alibaba chief marketing officer Chris Tung said.

“We have nearly 600 million customers and we know not all of them are your customers, but maybe 10 or 20 million of them are and we want to help you talk to them directly. When you get into the lifestyle of your target, you are not just selling them a watch, a bag, a pair of shoes. You are sharing with them the story of your brand, a lifestyle.”

Meanwhile, on Friday JD.com revealed the addition of four luxury brands to its Toplife site at an event in Shanghai. Oscar de la Renta, Mulberry, Italian label Anteprima and knitwear brand Barrie joined names already on the Toplife roster, which include Alexander McQueen, Yves Saint Laurent and Derek Lam.

Unlike Tmall’s Luxury Pavilion, Toplife, which launched in October 2017, is a stand-alone app outside of the main JD.com infrastructure, featuring high end logistics and marketing support and it’s headline grabbing “white glove delivery service.”

“Merging online and off-line for luxury brands will continue to be a long-term process globally for the e-commerce industry. But as Chinese consumers are increasingly interested in discovering new luxury brands and expressing their individuality through fashion, there has been a new wave of interest in reaching those consumers effectively. So far brands have been interested to have a partner in China that both protects their IP and can deliver a customer experience that upholds their image and the experience their customers are used to,” said Shengli Hu, president of fashion and lifestyle at JD.com.

“If you look at luxury online, it’s really lagged other verticals. I think that high-end fashion brands are excited by the path we are blazing for what a luxury online experience can be.”

An important consideration for both Tmall and JD.com is the online to off-line experience, ensuring that online luxury retail can work as a complement to the in-store experience (where it’s available to consumers; in China, after all, a great many people live in regions not served by luxury bricks-and-mortar retail).

“Chinese consumers have shown over time that what their willingness to buy online can change, and very quickly. Because off-line retail was underdeveloped in China, they have also shown a willingness to shop new categories before consumers in more developed markets,” Hu said.

“Fashion is a relatively tricky business for e-commerce, but with the right level of service we believe it will get easier. That’s why JD created Toplife, and also why we’re also investing in the technology to personalize shopping experiences based on taste, to work with fitting issues, and more, in the long-term.”

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