One year into its partnership with Alibaba, Macy’s is happy with the results it has seen so far on the Tmall platform and considers China a long-term component of its strategy, according to Dustin Jones, executive vice president and managing director of Macy’s China Limited.
Macy’s launched its Tmall store on Nov. 1, 2015, in the lead up to Singles Day. For Singles Day this year, the retailer played a starring role at gala countdown celebrations in Shenzhen. As part of the festivities, Macy’s and several other retailers debuted a virtual reality technology that “transports” customers to their physical stores around the world.
“This year, we did last year’s business in the first five minutes [of Singles Day],” Jones said Nov. 28 during the Fashion Asia 2016 conference here in Hong Kong. The executive declined to release financial figures but said it’s still relatively small business in China is growing exponentially.
“We’re not in the stage of looking at profitability because we have a deep investment. We have a business plan that is one that will keep us in China for a very long time,” he said, of the store, which just completed a Black Friday promotional event in China with Alibaba and staged a fashion show in New York in September to tout its business on Tmall.
Macy’s Tmall store is managed by a joint venture between the American retailer and Hong Kong-based Fung Retailing Ltd. The two companies have said they don’t rule out opening bricks-and-mortar Macy’s stores in China, but Jones said it is still too early to say when physical stores could happen. The landscape is challenging in terms of finding the right locations and partnerships, he said.
“I think it’s too premature for us to look at the actuality of stores when we’re so focused on the digital experience for us and customer acquisition,” he said, adding Macy’s big priority is adding new products and brands to its Tmall store. Right now the online store sells less than one percent of Macy’s total product offering in the U.S.
Jones said Macy’s has been selective in what it has offered in China, focusing mainly on private label merchandise. Some brands take issue with Alibaba over the company’s handling of fake products on its platforms so Macy’s has sidestepped the issue by not selling those brands’ products on its Tmall store, he explained, mentioning Michael Kors as an example.
“Just like we respect Alibaba, we respect those brands and their position,” he said.
Jones said coming to terms with such a massive company as Alibaba has been a learning process. Alibaba’s assets extend beyond Tmall to a whole universe of subsidiaries like electronic payment service company Alipay, travel booking web site Alitrip and financial services provider Ant Financial.
“They’re a huge company, I mean to the size and magnitude that we’re just not used to. And they’re a complex company that is entrenched in technology and entrenched in agility that we have never experienced,” he said. “You really have to find strategic purpose and meaningful value with one another…in order for you not to get lost in the sea of everything that is going on.”