SHANGHAI — Alibaba’s Tmall platform is looking to tap China’s burgeoning luxury e-commerce consumer base by launching a specialized channel in conjunction with local flash-sales site Mei.com.
The Tmall Luxury Channel operated by Mei.com went live on Tmall’s mobile app this month. The launch follows a strategic investment last July, rumored to be in the order of $100 million, by Alibaba in the flash sales site, which was previously known in English as Glamour Sales.
“The idea for us was to enlarge our audience, because we have been building for the past six years a community of about seven million people who have signed up to Mei.com and about one million active, engaged customers,” Mei.com chief executive officer Thibault Villet explained.
“Even though those customers are the top of the pyramid in China, compared to the vast size of the Chinese market, partnering with Tmall gives us the opportunity, along with our brand partners, to gain the reach and for us to enlarge our business.”
For Alibaba, the appeal of teaming with Mei.com is obviously that platform’s long-running relationships with luxury brands. Leading luxury players have proven reluctant to embrace China’s largest e-commerce company, which has been plagued by counterfeit controversies, particularly on its consumer-to-consumer platform, Taobao.
According to Villet, the majority of Mei.com’s brand partners are excited by the opportunity to reach the more than 100 million consumers who visit Tmall’s mobile app each day, though they have been careful to respect the wishes of those who don’t wish to be involved, with some brands opting out of the luxury channel but remaining on the main Mei.com site.
Those that are featured on the luxury channel include Fendi, Dior, Kenzo, Marc Jacobs, Carven and Victoria Beckham.
“I think the reason Alibaba invested in this company is because of our unique fashion and luxury DNA and because from day one we partnered with brands. We have built a relationship with close to 3,000 brands — 20 percent in beauty, 70 percent in fashion and 10 percent in lifestyle,” Villet said. “The real thing we represent for Alibaba is a good gateway between the luxury and fashion industry and their platforms.”
Franklin Yao, managing partner at Shanghai-based consultancy SmithStreet Solutions, agreed that for Alibaba the value proposition is all about strengthening their fashion and luxury credentials.
“Fashion is one of the last categories that Alibaba doesn’t have complete dominance in with their Tmall and Taobao networks, because in this specific space, consumers have a lot of choices,” he said. “From a consumer perspective, they are not willing to go on Taobao or Tmall for high-end fashion, for premium fashion, this is the one category for Alibaba where there is definitely room for them to grow.”
While the Tmall mobile app, which now accounts for 70 percent of the platform’s traffic, will host the channel, Mei.com will be responsible for its operations — including the selection of brands and products, logistics, customer care and marketing content.
A celebrity-studded interactive fashion show will be held in Shanghai next week to celebrate the official launch of the luxury channel, with Olivia Palermo and Korean Star G-Dragon both expected to attend. As looks from 80 of Mei.com’s brand partners are paraded down the runway, the 10 million consumers expected to tune into a live stream of the show will be able to buy the products.
“This partnership [with Alibaba] is giving us access to the great technology they have, there’s no doubt about that,” Villet added.